Sunday, 1 March 2015

Budget 2015 for the IT & BPO Sector

In the backdrop of buoyant growth projections, definite investor outlook and the assurance to have a non-adversarial tax regime, let's judge the Budget 2015 proposals impacting the IT & BPO sector. The Finance Minister displayed in his speech that India has emerged as a well-regarded and world-class IT industry that has contributed significantly to its financial growth, exports and employment generation.


While the IT& BPO industry had several particular expectations from this Budget, the FM's tax proposals want to be evaluated keeping in mind the goal of gradual transition from an exemption-based to an internationally competitive tax regime with certainty  and balance.  The proposals around delay of GAAR by 2 years with potential  application, increase in household  transfer pricing threshold from Rs. 5 Crore to Rs. 20 crores and gradual decline in headline corporate tax rate over 4 years from 30 % to 25 %, with phase-out of industry specific  incentives and amendments to the indirect change of possession laws to provide clarity are steps in the right direction.