Union Budget 2025: What Technology, Media, and Telecommunications Sector Expects?

As India gears up for the Union Budget 2025, the Technology, Media, and Telecommunications (TMT) sectors are keenly awaiting potential policy measures that could drive their growth and streamline operations. Recently, a report has been published by Deloitte, talking about the expectations of different sectors from the Union Budget 2025.

With the growing importance of digital infrastructure, connectivity, and the dynamic media landscape, stakeholders in these sectors hope that the government will address key concerns, offer incentives, and provide clarity on taxation issues. The upcoming budget could provide the much-needed boost for innovation, investment, and ease of doing business in this ever-evolving domain.

Expectations by TMT Sectors

Tax Concessions For Data Centres

As data centres are crucial for the rise of mobile internet and cloud computing in India, industry players are hopeful for tax breaks such as a tax holiday or concessional tax rates, similar to those offered to the manufacturing sector. These measures are seen as essential to support the government’s “Digital India” vision.

Increased Scope For Carry Forward of Losses on Amalgamation

The TMT sector advocates for a broader application of the benefits of carrying forward losses and unabsorbed depreciation in the case of company amalgamations. This could help the sector deal with financial setbacks while promoting consolidation in the industry.

Clarification on Taxation of Income From Non-Resident Telecom Operators

There is an ongoing issue regarding the taxation of payments made by Indian companies to non-resident telecom operators for interconnectivity and bandwidth charges. Clarity on whether these charges should be classified as royalties under Indian tax law is highly anticipated.

Clarity on Taxation of Software Revenues of Non-Resident Sellers

The taxability of software revenues earned by non-resident sellers remains a point of contention. A resolution on whether such revenues should be classified as royalties or business income, especially in the absence of a Permanent Establishment (PE), is eagerly awaited by the sector.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.