The Hindu Business Line : COAI seeks extension of tax holiday

CELLULAR operators have sought extension of the tax holiday under Section 80 (IA) of the Income-Tax Act for another five years in its pre-Budget recommendations to the Government.

Under the present tax holiday, telecom operators are exempted from paying income-tax for 15 years from the commencement of operations.

In its representation to the Government, the Cellular Operator's Association of India has pointed out that while other infrastructure sectors like power enjoy a 20-year tax holiday, the fast growing telecom sector has a 15-year tax holiday.

"Telecom sector should be treated at par with other infrastructure sectors like power. Benefits applicable to the power sector under Section 80 (IA) should be extended to telecom sector as well," said a COAI presentation.

COAI has also sought extension of the last date for availing the benefits to March 2007 instead of the present cut off date of March 2005. Under the present system, companies that begin operations before March 2005 are eligible for taking the benefits under the tax holiday.

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