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Press Information Bureau
Government of India
Ministry of Communications
24-August-2012 17:28 IST
Incentives for Information Technology Sector

National Association of Software & Services Companies (NASSCOM) has projected a $100 billion revenue for the IT-ITES sector (including hardware) both for exports and domestic for FY2011-12. Out of this IT-ITES exports (excluding hardware) has contributed US $68.7 billion in FY2011-12 as compared to US $59 billion in FY2010-11. During this period direct employment by IT-ITES sector has increased from 2.54 million to 2.77 million , with a net addition of 2.3 lakh to its work force.

Government extends several incentives for Information Technology Sector in the country. Some of them are

(i) Under Software Technology Parks (STP) scheme, approved units are allowed to import goods required by them for carrying on software export activities as per the Foreign Trade Policy. Such goods may be imported either on outright purchase basis or free of cost or on loan basis from the client without payment of custom duty.

(ii) Software is also exempted from basic customs duty.

(ii) 235 IT-ITES specific Special Economic Zones (SEZs) have been notified across the country, which are contributing to IT-ITES exports. Section 10AA of the Income Tax Act provides for a deduction from the total income of hundred percent of profits and gains derived by a unit located in a SEZ from the export of articles or things or from services for the first 5 consecutive assessment years, of fifty percent for further 5 assessment years and thereafter, of fifty percent of the ploughed back export profit for next 5 years.

(iii) The Department of Commerce, Ministry of Commerce & Industry through Marketing Development Assistance (MDA) and Market Access Initiatives (MAI) Scheme assists exporters for export promotion activities abroad.

The Minister of State for Communications and Information Technology Shri Sachin Pilot stated this in the Rajya Sabha today.

BK/AT/PM