The Infosys managing director Nandan Nilekani has said that its time for the infotech industry to pay its dues. This has been reported by a leading financial daily. Although this has been opposed by the industry body Nasscom, the fact remains that a tax on software exports would not only bring in revenue for the government but also possibly stop the use of hawala transactions being undertaken in the guise of software exports. Or at least bring them under the tax net!
Despite claims of high taxation on corporate India, the fact is that Indian companies are among the lowest income tax payers in the world. Although there are many companies who pay around 35% tax, the average rate of tax that most of the Top 200 companies in India pay is around 20%. In the USA, the average rate of tax is around 25–30% and in South–East Asia it is around 30%.
The opposite view is that since software exports are expected to touch $ 87 bn by 2007, the encouragement to the sector by way of tax benefits should continue since the growth in the foreign exchange reserves more than makes up for the loss of tax revenue.
A via media would be to bring the software companies under the tax net by imposing a tax initially of around of 5%–10% and gradually doing away with the tax benefit within (say) three years.
For the quarter ended December 2020, INFOSYS has posted a net profit of Rs 52 bn (up 16.8% YoY). Sales on the other hand came in at Rs 259 bn (up 12.3% YoY). Read on for a complete analysis of INFOSYS's quarterly results.
For the quarter ended September 2020, INFOSYS has posted a net profit of Rs 49 bn (up 20.3% YoY). Sales on the other hand came in at Rs 246 bn (up 8.6% YoY). Read on for a complete analysis of INFOSYS's quarterly results.
Here's an analysis of the annual report of INFOSYS for 2019-20. It includes a full income statement, balance sheet and cash flow analysis of INFOSYS. Also includes updates on the valuation of INFOSYS.
Here's an analysis of the annual report of INFOSYS for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of INFOSYS. Also includes updates on the valuation of INFOSYS.
More Views on NewsA tiny chemical company, started in the Licence Raj era, is a great example of a new wealth creating opportunity.
In this video I'll show you exactly how I go about picking stocks for trading.
Rather than predicting the market, successful investing is more about preparing well and placing your bets accordingly.
What should you do if the market falls? In this video, I'll tell you what I will do.
Ajit Dayal on how India's vaccine strategy will impact the markets.
More
Equitymaster requests your view! Post a comment on "Infosys favours taxing infotech exports". Click here!
Comments are moderated by Equitymaster, in accordance with the Terms of Use, and may not appear
on this article until they have been reviewed and deemed appropriate for posting.
In the meantime, you may want to share this article with your friends!