23 February 2011

Budget 2011: Tax benefits under the Software Technology Parks of India (STPI) and export-oriented unit schemes EOU are not likely to be extended beyond March this year

Tax benefits under the Software Technology Parks of India (STPI) and export-oriented unit schemes are not likely to be extended beyond March this year, the Commerce Ministry indicated today.

"... there is a sunset clause, the Finance Minister announced in his last Budget that this would be the final year (of STPI and EOU scheme). However, we are using all our good offices to try and pursued the case on your (industry) behalf. Lets hope for the best," Minister of State for Commerce and Industry Minister Jyotiraditya Scindia said here.

The $76 billion software industry has requested the government to extend the Software Technology Parks of India (STPI) scheme till the Direct Tax Code (DTC), which is under consideration, is implemented.

Similarly, exporters are also demanding from the government to extend the export oriented unit (EOU) scheme.

Under STPI and EOU schemes, companies enjoy tax exemptions on profits under Section 10A and Section 10B of the Income Tax Act. These benefits, which were set to lapse in 2009, were extended by one year till March 2011 in the Budget last year.

Scindia was speaking at AIMA award function. Earlier in the day, speaking on the occasion, Commerce and Industry Minister Anand Sharma said that, "clean and green technology is the need of the hour and India is ready to play a defining role".

Sharma also said that the government is working to build India as a manufacturing capital of the world so that more and more jobs can be created to use the global opportunities.
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