Mahajan sees infotech ESOP tax sop

Mahajan sees infotech ESOP tax sop
AGENCIES

NEWDELHI, APRIL 15: Information Technology Minister Pramod Mahajan today said he was "hopeful" that the Finance Ministry would consider software industry's demands on tax holiday for Technology Parks and avoiding double taxation on Employee Stock Option Schemes (ESOPs).

"I have already taken up both these issues with the Finance Ministry and hope for a positive response when the Finance Bill is passed," Mahajan said after inaugurating the first toll-free hotline against anti-piracy here.

Mahajan said he was well aware of the importance the software industry attached to these issues and would take them up again with the Finance Ministry before the Finance Bill was passed. This year's Union Budget proposed that companies which registered under Software Technology Parks of India (STPI) scheme after April one, 2000 would not be eligible for a 10-year tax holiday.

The software industry has also been demanding that ESOPs be taxed only at the time of exercising the options. Currently they are also taxed at the time the employee receives them from the company.

Sankhya Vahini: Mahajan clarified he has no objection to the controversial Sankhya Vahini project involving investment of over Rs 1000 crore. ``I have not written any letter to anybody,'' Mahajan remarked after he was asked whether he had pressed for review of the project. He said the project has been cleared by the cabinet and no individual Minister or ministry can now have objection to it. ``Whatever discussion took place at the cabinet level cannot be disclosed,'' Mahajan said. Asked whether the cabinet itself could review Sankya Vahini, the Minister said it was up to the Prime Minister.

He was talking to reporters at the launch of Nasscom-BSA toll-free hotline for software anti-piracy. Sankya Vahini, the nationwide data network, is proposed to be a joint venture between the department of telecom services and the US-based IUNet which in turn is a fully owned subsidiary of GUNet, an outfit of Carnegie Mellon University.

The Minister said the cabinet had taken into account all the aspects of the project, including the security factors. ``The cabinet has taken all these issues, including the security, into consideration,'' he said.

Mahajan said only the Minister in-charge of the Department of Telecom services can comment on the status of the project since that department is the implementing agency.

Mahajan acknowledged IT as the most powerful tool that could improve living standards of people and hoped the Information Technology Bill, pending before a parliamentary standing committee, would soon be adopted. He termed IT as ``future'' but stated that unless supplemented by an effective legislation, cyber wave sweeping the nation would not give fruitful results.

``Despite having technology, today we cannot send court summons by E-mail nor can we table a CD-ROM in Parliament as we do not have any legal sanction for such procedures but have to go by the lengthy age old exercise. This will change once the IT legislation comes into play giving software industry its due utility,'' he said.