IT industry seeks clarity on tax provisions for BPO/KPO services, quashing of angel tax
The Indian IT-BPM industry today stands at USD 167 billion market and employs around 4 million people
- IT industry body Nasscom has urged the government to clarify tax provisions that treat BPO-KPO services as intermediaries under GST rules, and scrap angel tax levied on investments in startups.
- Expressing concerns over rising instances of revenue authorities treating IT-enabled services, including BPOs and KPOs, as ‘intermediary services’, Nasscom Senior Director and Public Policy Head Ashish Aggarwal said there is an urgent need to address the outstanding issue.
- He also called for scrapping the angel tax provision and said the focus should be on measures to incentivise startups.
- Aggarwal explained that the flaw in the present approach is the focus on valuation as a means to verify the genuineness of the investment transaction.