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Tax holiday extended to broadband, ISP firms

01-March-2001
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Tax holiday extended to broadband, ISP firms

It's good news for companies setting up new units for telecom, ISP, and broadband projects. The five-year tax holiday -available to telecom undertakings set up on or before March 2000 - has now been extended to include all telecom, ISP, and broadband companies or units set up on or before March 2003. This holiday allows a further deduction of25 per cent of profits (30 per cent in case of companies), under the section80-IA.

The proposed amendment will take effect retrospectively from April 1, 2001,and will apply in relation to assessment year 2001-2002 onwards.

Reacting to the Budget proposals, chairman of Telecommunications Committee of Assocham and president, Telecom Industry Services Association (TISA), Mr. PK Sandell, said that allowing five-year tax holiday and 30 per cent deduction to telecom, ISP, and broadband networks is an excellent proposal. However, the time limit of March 31, 2003, will not result in the benefit actually enjoyed by the companies because of the bureaucratic delay that exists for licensing and clearance procedures," he added.

Mr Rajeev Mehrotra, president Association of Basic Telecom Operators, (ABTO) also welcomed the extension of the tax-holiday to infrastructure projects. This had been one of our key demands since very few companies had been able to start operations in any significant manner in the last five years.

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