CBDT issues clarification on units in software park

New Delhi, Mar 31 (UNI) The Central Board of Direct Taxes (CBDT) today issued instructions to its field authorities that the claim of deduction under section 10A of the Income-tax Act, shall not be denied to STP units only on the ground that the approval/registration to such units has been granted by the Directors of Software Technology Parks.

However, this deduction shall be subject to fulfillment of all other conditions provided in the concerned section of the Act.

Section 10A of the Income-tax Act, 1961 provides for 100 deduction for 10 years, of export profits derived by units set up in any Software Technology Park, which is in accordance with the Scheme notified by the Central Government.

The STP scheme notified in 1995 required approval of the Software Technology Park by the Inter-Ministerial Standing Committee of the Department of Electronics. However, it has been noticed that a large number of units registered/approved only by the Directors of the Software Technology Park are claiming deduction u/s 10A.

Further, in cases where assessments/reassessments have already been completed, and the claim u/s 10A has been disallowed only on the ground that the approval to the STP has not been granted by the Inter-Ministerial Standing Committee in accordance with the Scheme, the demand so arising shall be kept in abeyance until further orders, it was clarified.

UNI PC SR DB1854