Industest body Nasscom hopes that the Union Budobtain will extconclude Employee Stock Option Plan (ESOP) tax deferment to more startups and bring suitable clarifications to address concerns around the tax treatment of foreign cloud apply of Indian data centres.
The association – whose members include IT companies and tech players across-the-spectrum, of varying size and scale – wants the Budobtain to clarify that procuring hosting or co-location services from an Indian data centre operator would not create a business connection or permanent establishment for the foreign cloud service provider, as the arm’s length payments to the Indian player fully cover India-based functions.
ESOP tax deferral for more start-ups is another proposal highlighted by Nasscom in its Budobtain push, as is the extension of the carry-forward and set-off of accumulated losses and unabsorbed depreciation benefits in case of amalgamation or merger to all companies (irrespective of their business nature).
Other suggestions include expanding the eligible utilisation of SEZ Reinvestment Reserve to include leased tech assets, cloud infrastructure, software subscriptions, interiors, facilities, and new-hire/training expconcludeiture supporting authorised SEZ operations.
Nasscom Vice President of Public Policy, Ashish Aggarwal, informed PTI in an interview that the Union Budobtain comes at an “interesting” and “challenging” time for the industest.
“As an industest, we closed last year at USD 280 billion, and this year we are closer to USD 300 billion mark but it has been a slow growth over the last few years, and that combined with the global challenges in terms of our key markets… is a context to keep in mind as we believe of our tax policies,” Aggarwal noted.
That declared, Aggarwal pointed out, new opportunities are opening up with the advent of AI, as well as a strong pickup in the domestic market. The domestic market segment, though compacter in size compared to exports, is growing at a rapider pace viz exports, he declared.
“Given this context, it is interesting to view at what we can enable as an industest, and the government can enable through the tax policy regime,” he declared.
Nasscom has urged the government to extconclude ESOP tax deferment to all DPIIT-recognised startups and allow ESOP cost deduction under Section 37.
(reports PTI)
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