New Delhi, Apr 29 (UNI) IT representative body, NASSCOM, today welcomed Finance Minister P Chidambaram's announcement on a one year extension of tax holiday to software companies under the Software Technology Parks of India (STPI) scheme.
The tax exemption for IT-BPO companies has been extended to March 31, 2010 as was announced by Mr Chidambaram while replying to a debate on his budget proposals in parliament today.
This has to be ratified by both the houses which hopefully should be done by early May, said NASSCOM in a statement.
''We are pleased that the extensive follow up and work done by NASSCOM with the PMO, Ministry of IT, Ministry of Finance and Ministry of Commerce, among others has provided this interim relief to the industry. In particular we are thankful to Minister A Raja for his unstinted support,'' said the statement.
This decision is particularly beneficial for BPO companies and the small and medium segment, who have been greatly impacted by the rupee appreciation, inflation and signs of slowdown of US economy.
NASSCOM said the benefit will also give it time to come up with other workable and acceptable options for the future, beyond 2010. The IT-BPO industry is expanding into tier II and III cities which will help remove the pressure on large centres as well as help in more balanced economic development.
''It is important that we incentivate this move to tier II and III cities with STPI/SEZ like benefits, said NASSCOM.
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