New Delhi | RBN News
In a significant policy move for the technology sector, Union Finance Minister Nirmala Sitharaman announced a proposal in the Union Budget 2026–27 to bring multiple technology-driven services under a single regulatory and tax framework.
Presenting the Budget in Parliament, the Finance Minister said India has emerged as a global leader in software development services, IT-enabled services (ITeS), knowledge process outsourcing (KPO), and contract research and development related to software. She noted that these segments are closely linked in terms of operations, delivery models, and value chains.
To simplify classification and provide greater certainty to the industry, the government has proposed to club all these segments under one consolidated category titled “Information Technology Services.”
As part of this restructuring, a uniform safe harbour margin of 15.5 per cent will be applicable across all services falling under the new category. The move is aimed at reducing tax-related ambiguity, easing transfer pricing compliance, and lowering the scope for disputes between companies and tax authorities.
Industry experts believe the decision will enhance ease of doing business, particularly for multinational firms operating global delivery centres in India. A single classification is also expected to streamline compliance processes and improve predictability in tax planning.
The announcement is being viewed as a step towards reinforcing India’s position as a preferred global hub for technology and digital services, while aligning tax policy with the evolving nature of the IT industry.
