The move aims to attract global cloud players, cut tax disputes, and boost India’s IT and digital services ecosystem
Finance Minister Nirmala Sitharaman on Sunday announced a tax holiday till 2047 for foreign companies providing cloud services to Indian customers, provided the services are routed through an Indian reseller entity, in a major incentive to attract global technology players.
Sitharaman said the measure is aimed at deepening India’s digital infrastructure, encouraging long-term foreign investment, and strengthening the domestic cloud services ecosystem.
Alongside the incentive, the finance minister also unveiled significant relief for the IT sector. IT services, IT-enabled services (ITES), and contract R&D will be clubbed under a single safe harbour regime at a rate of 15.5 per cent, offering greater certainty on transfer pricing.
In a key expansion, the government raised the Safe Harbour eligibility threshold for IT services from ₹300 crore to ₹2,000 crore, substantially widening the scope of companies that can opt for simplified tax norms.
The announcements are expected to reduce litigation, improve ease of doing business, and reinforce India’s position as a global hub for IT, R&D, and cloud-based digital services.
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