Software firms may get tax breaks for on-site profit
By siliconindia staff writer   |   Tuesday, 10 February 2004, 20:30 IST
Printer Print Email Email
NEW DELHI: There’s some relief in store for software exporters, although they would cease to enjoy tax deductions under 80 HHE of the Income Tax Act from the coming fiscal, reports Economic Times. The Finance Ministry has decided to allow software exporters to claim a tax deduction, with retrospective effect, on profits earned from software services rendered on-site (i.e., at the client’s site outside the country). Exporters will enjoy the benefit of tax deduction on such profits earned from April 1991 to April 2004. The Central Board of Direct Taxes (CBDT) will issue a circular in this regard shortly, said a senior official. The issue of whether the benefit of 80 HHE should be legally available to both on-site and offsite software development services provided out of the country was examined by CBDT following representations from exporters. There has been confusion on the issue although the government had come out with a ‘declaratory’ legislation clarifying the legal position.

siliconindia