Extend tax holiday provisions for STPI units: iGATE

Sujit Sircar, CFO, iGATE expects that the upcoming budget will provide extensions of tax holiday provisions for STPI units, options of transition from STPI to SEZ units,  Exemption from MAT and DDT for SEZ units and litigations for IT Industry for 10A/Transfer Pricing provisions.   

DIRECT TAXATION

1. Extension of tax holiday provisions for STPI units:
Recommendation: Continuance of tax holiday for FY 2011-12, given the fact that, under the Direct Tax Code to be introduced from April 1, 2012, tax holiday for STPI units will be withdrawn.

Tax holiday scheme has helped the small and medium IT exporters, to reinvest the excess cash and grow their business.

2. Options of transition from STPI to SEZ units:
Recommendation: To allow the STP Units to shift to the SEZ scheme and continue to enjoy tax holiday, under the DTC, without any restrictions.

In terms of the Direct Tax Code (