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Govt may consider tax sops to IT cos post-DTC

The government may consider giving sops to IT companies in the country after the Direct Taxes Code (DTC) comes into effect, Communications and Information Technology Minister Kapil Sibal said.

twitter-logoPTI | October 8, 2011 | Updated 09:27 IST

The government may consider giving sops to IT companies in the country after the Direct Taxes Code (DTC) comes into effect, Communications and Information Technology Minister Kapil Sibal said on Friday.

"As you know, the 10-year tax (break) period is over, so we are waiting for the DTC to be put in place...We will certainly try and do something," Sibal said.

He, however, did not divulge more on this.

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The effective tax rates have gone up for IT companies after the Software Technology Parks of India (STPI) scheme ended earlier this year, trimming profits.

IT companies along with sectoral representative body Nasscom had asked the government to extend the STPI scheme till the DTC came into effect.

However, the STPI scheme which offered a 10-year tax break, came to an end on March 31, 2011.

The Indian IT industry, which gets about 80 per cent of its revenues from exports, has been concerned about the unemployment rates in the US and financial turmoil in certain European economies.

The industry is already reeling under high interest costs, soaring inflation and increasing labour costs. The sops, if introduced, would bring respite, especially to small and medium sized firms.

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