Mitigating concerns of the IT industry, global corporations and investors, Prime Minister Manmohan Singh came up with the declaration of setting up of a new panel to address the issues in taxation matters of the IT sector and research and development (R&D) activities. The new panel will provide better clarity on the taxation issues.
The panel will be chaired by N Rangachary, the former chairman of the Insurance Regulatory and Development Authority (IRDA) and the Central Board of Direct Taxes. It will study the provisions that offers incentives to IT firms operating from software technology parks and will be responsible to address issues like approach to the taxation of development centres, tax treatment of onsite services of domestic software firms and those related to finalizing safe harbour provisions announced in the Budget for 2010.
The main goal of the panel is to have a fair tax system in line with best international practice, which will promote India’s software industry and promote India as a destination for investment and for establishment of Development Centres. Over 750 MNCs operate in a wide range of fields, including software, IT hardware, pharmaceutical R&D, automobile/scientific R&D at over 1,100 locations in India.
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