« Top Headlines » Open DEMAT Account in 24 hrs  Mock Test Papers Series - I & II for Students appearing in CA Foundation January 2027 Examination.  Income Tax Rules 2026: CBDT Introduces Revised Form 161 for Penalty Waiver, Clarifies Misreporting Categories and Taxpayer Relief  ITR Filing and Income Tax Audit Deadline Extended: 5 Critical Things Taxpayers Must Know  Filing Belated ITR for AY 2026-27? Know Which Losses You Can Carry Forward and Which You May Lose  CBDT Extends Tax Audit Report Deadline to October 21, ITR Filing Last Date to November 21 for AY 2026-27  CBDT Extends AY 2026-27 ITR Filing Deadline for Tax-Audit Cases: New Dates and Key Compliance Details  Foreign Assets Missing From Your ITR? Income Tax Department Opens One-Time Disclosure Window  Tax Audit Deadline September 30: Why AIS, TDS and GST Figures May Not Match Your ITR and What Taxpayers Should Do  Tax audit deadline September 30: Common mistakes taxpayers should avoid  Your ITR says ‘verified’, but the refund hasn’t arrived? 5 reasons why your money could be stuck  Missed the ITR Deadline but TDS Refund Is Due? Here’s How You Can Still Claim Your Money «  Mauritian tax agreement under scanner... Tax management, the Infosys way... » Software cos pay lower taxes while income rises August, 14th 2006 Most revenues come from new, tax-exempt offshore units Software services companies seem to be paying lower taxes even though their revenues have been growing. A look at the profit and loss accounts for some of the top IT exporters listed by the Natioanl Associationof Software and Services Companies (Nasscom) this July, shows that provision for taxation as a percentage of Profit Before Tax (PBT) has declined in five of the ten companies considered. Barring Polaris Software Labs and Patni Computers, no other company has seen an increase in this ratio. Infosys Technologies and Cognizant Technology Solutions have seen a reduction in provision for taxation even in absolute terms. Infosys provided Rs 303 crore for taxes in 2005-06 as opposed to Rs 325 crore the previous year. Cognizant provided Rs 85.5 crore and Rs 117.74 crore during 2005-06 and 2004-05 respectively. It is understood that provision for taxation is made on three accounts tax on profits generated from onsite operations, tax on interest income and tax on profits generated from offshore locations (that have come out of tax-free STPI schemes). The table indicates that tax paid by IT companies is falling while revenues are growing. Does it mean more revenues come from the tax-free STPI units? Mr Rajesh Ramaiah, Corporate Treasurer, Wipro Ltd, says, "The additional exports done every year by Wipro are out of a tax-free Software Technology Parks of India (STPI) Unit." The ratio for Wipro has been marginally reduced over 2005-06 and 2004-05. IT companies enjoy a ten-year tax holiday from the time of inception and by 2009, irrespective of the ten-year period, all profits from IT companies will be taxed. IT majors like Wipro, Satyam Computers and Infosys have few facilities that have existed for ten years or more. Most new facilities have come up over the last five years. Companies failed to share the revenue split from taxed and un-taxed units. It is understood that most revenues come from the new un-taxed units. Some of Satyam's facilities started being taxed this year. Mr Srinivas Vadlamani, Chief Financial Officer, Satyam, says, "The increase in tax in 2005-06 is because we have not included provision for deferred tax and FBT. These form around 1.4 per cent of the PBT. So effectively there has been no increase in the last two years."