IAMAI Seeks Income Tax Exemption for Digital Media companies

New Delhi:The Internet and Mobile Association of India [IAMAI] in its annual Budget representation to the government has suggested that internet and mobile value added services companies be given tax exemption along the lines of software and services companies for the next five years under section 10 (a) of the Income Tax Act. This industry has been growing on its own steam for the last 10 years and given some support from the government, is capable of not only serving and empowering the Indian market but also build global brands.

Commenting on the suggestion, Dr. Subho Ray, President IAMAI argued, “Without adequate provisioning of content and services, the government’s huge investments in broadband infrastructure is likely to have limited impact. Direct fiscal benefits to content and services companies will ensure that more and more consumer centric services are available at the end of the pipe”

According to the association, while it might be against the grain to argue for tax exemption, it is important to keep in mind that the software, ITeS and Telecom industry which are among the most visible sectors in India today have had remarkable growth backed by government’s fiscal support in one form or the other.

The association contends that one of the pre-conditions of meeting the government target of 600 million internet users by 2015 is local language content and services that is woefully lacking. Without direct fiscal incentives in the form of exemption of direct or indirect taxes, it is very unlikely that local language will ever become popular in India.

Leave a Reply