The Department of Telecommunications (DoT) has proposed to the Ministry of Finance that tax benefits given to telecom service providers under Section 80-IA of the Income Tax Act be extended from the present 15 years to 20 years.

The Department of Telecommunications (DoT) has proposed to the Ministry of Finance that tax benefits given to telecom service providers under Section 80-IA of the Income Tax Act be extended from the present 15 years to 20 years. Under the existing norms, in the first 15 years of operation, telecom operators have to choose a block of 10 years for availing of the tax benefits. In the first five years of the block, they are entitled to 100 per cent exemption on taxable profit; for the remaining five years they get a 30 per cent exemption on the taxable profit. Only those service providers that have started operations on or before March 31, 2005 are eligible for tax benefits under this section. The department has proposed to extend this date to March 31, 2010 so that the benefits of the section can be extended to the new operators that have been awarded licences and spectrum in early 2008. The proposal comes ahead of the union budget that is to be announced on February 26, 2010.