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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AIITA welcomes Karnataka’s ban on obscene songs in school events
Bhatkal: The Karnataka unit of the All India Ideal Teachers Association (AIITA) has welcomed the Karnataka government’s decision to strictly ban school children from dancing to obscene songs during educational and cultural programmes in government, aided, and private schools across the state.
AIITA Karnataka State President M. R. Manvi congratulated the government for taking what he termed an important step to preserve the sanctity of education.
“Such decisions to safeguard the dignity of school children and uphold the values of education are the need of the hour. This rule should not be limited to government schools alone but must be strictly implemented in all private educational institutions as well,” he said.
He further urged the government to address other concerns within school programmes.
“The government should not only prohibit obscene dances in the name of school anniversaries, but also ensure that plays and dialogues that incite religious hatred are avoided. Schools should be centres of harmony, not platforms for spreading hatred,” he added.
According to a recent circular issued by the Department of School Education and Literacy, obscene dances are adversely affecting the mental health and moral values of students.
In this regard, schools have been advised to use songs that promote nationalism, positive thinking, the greatness of Kannada culture, and value-based traditions instead of inappropriate content during programmes.
The circular also emphasises that students should be dressed in decent attire.
AIITA also backed the department’s warning that disciplinary action would be taken against head teachers if such guidelines are violated. The association has further demanded that district Deputy Directors of Public Instruction strictly monitor the implementation of these rules.
