In addition to these initiatives, we hope that the budget 2019 would bring in more tax sops for companies that create software intellectual property (IP) in technology platforms, software products or software solutions amongst others.
Such companies require very high initial investment and often go through a long gestation period before they can expect results and positive outcomes. The Government of India can give benefits and tax breaks for IP creation, and encourage selling such technology platforms, products and solutions in overseas markets.
It should also give priority for using them in the applicable government entities. This truly reflects the theme of Make In India and helps in generating additional employment opportunities as more IP gets created and usage increases.
Our neighbouring countries in the Asia Pacific region have been providing various incentives to improve IP infrastructure and strengthen their innovation capabilities. Countries such as Singapore, Thailand and Hong Kong allow companies to claim tax deduction of 150% to 250% of R&D spend. Singapore gives further incentives by taxing any revenue generated from IP at much lower tax rate and giving subsidy of up to 30% of expenses incurred on manpower, training and material costs.
Sundararajan S, Executive Director, i-exceed