Demands on IT companies to be relaxed by the Income-Tax department?

There is a flicker of hope for Indian software companies battling a barrage of claims from the Income-Tax Department. In the last few days, the Central Board of Direct Taxes, an arm of the finance ministry, has asked tax offices in cities where the software firms are based to share their views and details on tax notices served on these companies. The board is taking a relook at the tax demands and may come out with a clarification that is expected to soften the tax blow on many software companies, including some of the big names in the Indian IT industry, a tax official told ET. In the last two years, several software companies came under tax scrutiny as assessing officers argued that tax exemption cannot be claimed by companies for 'body shopping' deals as well as on earnings from exporting software that was not developed within software technology parks (STP), export-oriented units (EoU) and special economic zones (SEZs).