Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: VAT RATES :: list of goods taxed at 4% :: ACCOUNTING STANDARD :: ACCOUNTING STANDARDS :: cpt :: due date for vat payment :: empanelment :: VAT Audit :: TAX RATES - GOODS TAXABLE @ 4% :: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: articles on VAT and GST in India :: form 3cd
Indirect Tax »
 CBEC rechristened Central Board of Indirect Taxes and Customs
 Income tax department to challenge ITAT relief to Cairn Energy in HC
 5 crucial ways how doing business will be different under GST
 What is the lowdown on the Goods and Services Tax
 Ineligible Input Tax Credit Under Gst Regime
 What is GST, how is it different from now: Decoding the indirect tax regime
 Indirect tax collection can fall short of FY’17 target
 GST in last lap: What's in it for businesses, firms and most importantly, you?
 Indirect tax collection: All you want to know about stuck cases and rejected appeals
 Government achieves revised tax collection target
 Keep indirect taxes 'low, affordable' under GST

Demands on IT companies to be relaxed by the Income-Tax department?
May, 28th 2012

There is a flicker of hope for Indian software companies battling a barrage of claims from the Income-Tax Department.

In the last few days, the Central Board of Direct Taxes, an arm of the finance ministry, has asked tax offices in cities where the software firms are based to share their views and details on tax notices served on these companies. The board is taking a relook at the tax demands and may come out with a clarification that is expected to soften the tax blow on many software companies, including some of the big names in the Indian IT industry, a tax official told ET.

In the last two years, several software companies came under tax scrutiny as assessing officers argued that tax exemption cannot be claimed by companies for 'body shopping' deals as well as on earnings from exporting software that was not developed within software technology parks (STP), export-oriented units (EoU) and special economic zones (SEZs).

The CBDT review is underway at a time the outlook for the country's export-focussed IT industry has worsened, with commentary from a few top IT firms reflecting the uncertainty that their clients - especially those in the financial services sector - are facing.

Revenue growth for the country's top four software firms is at its lowest since 2009, when the IT sector felt the heat of recession and reduced spends. While Nasscom, the apex software industry body, has predicted an 11-14 per cent growth for fiscal 2013, there are more sceptics than believers in this target. Many analysts believe Nasscom will have to eventually revise this target. Some large players, which give out guidance, have forecast slower than 11 per cent growth or scaled down the guidance they had given earlier.

Against such a backdrop, software exporters are believed to have lobbied with the government on issues raised by the Income-Tax Department. On onshore software development, derogatorily called body shopping, the tax department's view was that 'deputation and technical manpower' (DTM) contracts were not software exports, and hence not eligible for tax exemption under Section 10A/AA of the Income Tax Act. According to the tax office, in such contracts, Indian companies deputed software professionals at the premises of overseas clients for three to six months during which they were under the supervision of the clients.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Multimedia Presentations Multimedia Solutions 3D Solutions Corporate Presentations Business Presentations Multimedia Presentation India M

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions