Terming the Union Budget as pragmatic and forward looking,N Chandrasekaran,CEO & MD of TCS appreciated changes to the personal income tax. "We welcome the clarification on Section 10AA and the Direct Tax Code,implementation date and the changes to the personal income tax are very beneficial to all professionals," says Chandrasekaran. Ajai Chowdhry,CEO and Chairman of HCL Infosystems calls the budget a balanced one. Overall the budget was well balanced and responsible. Various projects and schemes announced by the government will see increased role of Information Technology as an enabler towards more inclusive growth," Chowdhry said. Further,the deduction on in-House R&D will definitely help put back focus on R&D. Going forward IT will play an important role in driving these nation building initiatives across sectors, he added. For Atul Hemani,MD,Omnitech InfoSolutions,the budget has been satisfactory but he feels that the STPI benefits should have been extended by one more year considering the economic scenario outside India. This budget is also a booster for the research and development in Indian IT industry would have added to the flavor. Furthermore MAT should not have been increased as it will have a serious impact on the 100% export oriented units in India across industry verticals (major impact being on IT industry), opines Hemani. The increased income tax slab has come good for the individuals but he rise in the fuel prices will add to the rising inflation of the economy. With continued focus on infrastructure development the overall economy as a whole will get benefited, Hemani adds. Munish Gupta,Vice-president,India Operations,GlobalLogic finds the budget optimistic. "The budget presented by our financial minister clearly states that the worst is over for the Indian economy,and 10% growth projected by him looks realistic,but,the IT industry has nothing really to look forward." "Though during the current fiscal year,the IT sector witnessed a significant revival in revenue and the growth is upbeat for the coming calendar year,no mention of extension of a tax holiday scheme for software firms in the minister's speech. The tax break also ends in March 2011," Gupta adds. Surjeet Singh,Chief Financial Officer,of Patni Computer Systems feels Budget has not addressed IT Industrys demand for extension of Tax holiday under STPI scheme as per Section 10 (A) of Income Tax Act which is a significant negative for the Industry. Increase in MAT from 15% to 18% on book profits would result in higher outgo of cash in the short term and would affect Indian corporates adversely. However this impact has been cushioned to a large extent by lowering of corporate surcharge from 10.0% to 7.5%, says Patni. "We welcome a higher percentage of weighted deduction on in-house R&D which has been increased to 200% from 150% as it will incentivise IT companies innovation focus. We appreciate the setting up of 'Technology Advisory Group for Unique Projects' along with substantial outlay for UID project. Tax reduction on account of changed tax slabs for individuals will also benefit the industry indirectly," Patni adds. Vishnu Dusad,CEO& MD,Nucleus Software feels that the allocation of Rs 1900 crore for UID project and the announcement of the modernization of national employment exchanges are some steps mooted which would help the IT industry as a whole. Though the budget looks positive on the fiscal front,there is no mention of extension of the STPI scheme for software firms in the Minister's speech,says Dusad. The scheme ends March 2011 and we have repeatedly stressed the rationale of extending the same to benefit medium and small sized players for whom a SEZ transition is difficult. The announcement of RBIs consideration of giving additional banking licenses to private sector players will facilitate financial inclusion and provide additional opportunities in the BFSI vertical," adds Dusad.
