No major sops for IT sector

IT sector

 Budget Provisions

The Central Government Departments and Ministries to integrate their services with the e-Biz -a single window IT platform- for services on priority by 31st December 2014.

The special focus would be given on supporting software product startups

The Pan India programme “Digital India” to with an outlay of Rs 500 crore to be launched.

The Programme for promoting “Good Governance” to be launched and sum of Rs 100 crore provided.

The rate of tax on long term capital gains increased from 10% to 20% on transfer of units of Mutual Funds, other than equity oriented funds.

Budget Expectations

MAT on SEZ income to be withdrawn – Not fulfilled

Tax deductions for onsite services – Not fulfilled

Stocks to Watch

TCS, Infosys, Wipro and HCL Technologies

Outlook

There are no major sops and Union budget 2014-15 is non-event for the Indian IT industry.

The increase on tax from 10% to the 20% on long term capital gains from transfer of units of Mutual Funds, other than equity oriented funds is negative for the Indian IT players as the invest the surplus cash in these instruments.

The Other initiatives included were positive but will have little impact on the Sector growth.

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