year''s union budget offered some disappointments to
the IT / ITeS sector. Proposals like the introduction
of MAT, increase in dividend distribution tax and FBT
on ESOPs came as negative surprises to the sector.
sector will have to bear the additional burden of MAT
of 11.22 per cent on the adjusted book profits. The
100 per cent EOUs, which were exempt from payment of
tax, will henceforth have to bear the double burden
of tax on income and expenditure (FBT). There is also
no mention regarding the extension of tax holiday to
the sector, says Sheetal Raut, head, finance, Synygy
India Pvt Ltd.
the consistent growth and profitability demonstrated
by this sector, it appears to be a fair argument that
the sector should contribute to the national exchequer.
However, on the other hand, the increased tax collection
on account of indirect taxes and taxes paid on salary
by the employees in this sector and the FBT paid more
than compensates the incentives extended to this sector.
should have been no tax levy on this sector at least
in the committed tax holiday period. It looks like it''s
an end of the tax holiday for the software companies
and the FM has given the signal by introducing MAT in
this year''s budget.
for the salaried individual, absolutely nothing is in
store. Just a marginal relief given to individuals by
increasing the basic exemption limit from Rs1 lakh to
Rs1.10 lakh and Rs1.45 lakh for women. Medical insurance
has been increased to Rs15,000 from Rs10,000.
was expected that the FM would leave more money in the
salaried individual hands by increasing the basic exemption
limit or increasing the limit u/s 80C but only a marginal
relief was extended.
the budget was directed towards growth and more emphasis
was laid on agriculture, healthcare sector and education.