What is Tax Holiday announced for foreign cloud firms till 2047 in Union Budget
New Delhi: Finance Minister Nirmala Sitharaman on Sunday announced a major tax incentive aimed at attracting global cloud service providers to set up and expand their operations in India. Under the Union Budget proposals, foreign companies that offer cloud services worldwide by using data centres located in India will be granted a tax holiday until 2047.
Announcing the measure, Sitharaman said the move is intended to draw global investment into India’s digital infrastructure, generate employment and strengthen the country’s role in the global digital economy.
A tax holiday is a policy tool used by governments to encourage investment. It involves a temporary reduction or complete exemption from certain taxes, usually corporate or income tax, for a defined period. Such incentives are often offered to promote specific sectors, boost economic activity and create jobs.
Under the new proposal, foreign cloud service providers will be allowed to operate globally using data centres based in India, but services to Indian customers must be routed through an Indian reseller entity. This structure is meant to ensure local participation and regulatory oversight while still allowing global companies to base their infrastructure in India.
Indian companies that provide data centre services to these foreign firms will receive a safe harbour tax rate of 15 per cent. Safe harbour provisions offer certainty on tax liability by fixing profit margins in advance, reducing disputes and making it easier for businesses to plan their operations.
The Budget also includes measures linked to electronic manufacturing. Non-resident companies will be allowed to use bonded warehouses in India to store components. These entities will be taxed on a profit margin of just 2 per cent of the invoice value, translating to an effective tax rate of around 0.7 per cent. The government says this rate is significantly lower than what is offered by many competing countries.
Explaining the rationale behind the move, Sitharaman said the policy would encourage large-scale investment in data centres and related infrastructure, create local jobs and help India emerge as a global hub for digital and cloud services.
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India trashes Pakistan's allegations of Indian hand in disturbing peace in Balochistan
New Delhi (PTI): India on Sunday categorically rejected as baseless Pakistan's allegations of an Indian hand in attempts to disturb peace in Balochistan, and said it is Islamabad's usual tactics to deflect attention from its "internal failings".
External Affairs Ministry spokesperson Randhir Jaiswal, trashing the charges, also highlighted Pakistan's record of suppression, brutality and violation of human rights.
"We categorically reject the baseless allegations made by Pakistan, which are nothing but its usual tactics to deflect attention from its own internal failings," he said.
Jaiswal was responding to Pakistan military's unsubstantiated claim that India was supporting terrorist elements in their attempts to disturb peace in Balochistan.
"Instead of parroting frivolous claims each time there is a violent incident, it would do better to focus on addressing long-standing demands of its people in the region. Its record of suppression, brutality and violation of human rights is well known," he added.
At least 15 Pakistani soldiers and 92 militants were killed in multiple counter-terrorism operations carried out by Pakistani security forces in Balochistan province, the Pakistan army said.
The operations were launched after militants belonging to ethnic Baloch groups carried out attacks at several locations on Saturday, it said in a statement.
The Pakistan army said the militants attempted to disturb peace by carrying out terrorist activities in and around Quetta, Mastung, Nushki, Dalbandin, Kharan and Panjgur, it said.
