Budget expectation from McAfee

As the IT, ITeS and BPO industry have been significant contributors to India’s GDP; the Indian government has adequately provided concessions and provisions in the past to ensure growth in this sector. We are positive that they would continue the trend in this regard. From an industry perspective, following are our key expectations from the Union Budget 2012-2013:

Ø The 2011 Union budget had provisions in decreasing the surcharge tax limit on corporate tax to 5% from 7.5%. This definitely helped Indian enterprises tremendously and we wish to see this continued in the budget this year.

Ø We hope the Minimum Alternate Tax which levied taxes on SEZs, severely affecting foreign investments in India is discontinued or reduced drastically. This would ensure continued momentum on investments which would strategically benefit our country in the long run.

Ø One of the main highlights in the last budget was enabling e-filing, e-payment of taxes, computerisation of commercial taxes and the creation of ‘Sevottam’ which has elevated the movement for country’s development in automated mechanism for tax administration. This has been crucial in boosting technology adoption amongst Indians. In this budget, we hope that the government enables more options in tax, pension and similar activities through an online platform to make it convenient for Indian citizens.

Ø Another crucial matter that needs to be addressed by the Finance Minister is clearly demarcating the line between treating software as goods or services. Hence relevant taxes can be imposed and companies can comply with the appropriate laws. As the software products industry is largely reliant on the channel ecosystem, the government should consider reduction of TDS for software resellers from the prevailing 10% to 1-2% to align with the corporate tax rate. Further clarification is also required in the definition of ‘Place of Effective Management’ in the proposed Direct Tax Code, given that we are the Indian subsidiary of multinational company.

Ø We would also like to take this opportunity in assuring our support to the government’s UID project and assistance required in the security requirements for the program.

Ø Also as India has witnessed sophisticated cybercrime cases affecting both enterprises and consumers, it has become increasingly important for us to have an evolved security system in place. Entities such as CERT have been playing a pivotal role in enhancing the security of India's Communications and Information Infrastructure through proactive action and user awareness, we would expect the Union Budget to apportion more grants to ensure secure data access for all Indians.