SECTION 10A READ WITH SECTIONS 10AA & 10B OF INCOME-TAX ACT, 1961 – CLARIFICATION ON ISSUES RELATING TO EXPORT OF COMPUTER SOFTWARE {212 TAXMANN 23 (ST.)}

Circular No.1/2013 (F No. 178/84/2012-ITA.I) dated 17/1/2013 The Indian software industry has been the beneficiary of direct tax incentives under the provisions like sections 10A, 10AA & 10B in respect of profits derived from the export of computer software. These provisions prescribe incentives to “units” or “undertakings”, established under different schemes, which are/were deriving profits from export of computer software subject to fulfilling the prescribed conditions. The software companies had represented to CBDT that there were several issues arising from the above mentioned provisions that are giving rise to disputes between them and the Income Tax authorities, leading to denial of tax benefits and consequent litigation and therefore require clarification. In the above notification, the Board has examined various issues highlighted by software industry and issued clarifications.