In A huge relief to the IT industry, software companies have been allowed to enjoy benefits of the software technology parks of India (STPI) scheme for another year.
Indian government has declared extension of tax concessions under Section 10A of the Income Tax Act to March 2010. The scheme was to expire in March 2009 under the sunset clause provided in the scheme. On an average, IT companies would have a revenue benefit of at least 5-7% (on the effective tax rate) because of this extension. The IT companies specially small & medium companies have been demanding the extension. In fact, it was on the top of their Budget 2008 wishlist.
This decision would certainly help the industry, especially the Small and Medium IT companies, which have been under tremendous pressure due to the rupee appreciation, wage inflation and several other factors.