Clarification regarding issues relating to export of computer software- direct tax incentives

The software developed abroad at client’s site would be eligible for tax benefits provided that there must exist a direct and intimate nexus or connection of development of software done abroad with the eligible units set up in India and such development of software should be pursuant to a contract between the client and the eligible unit. Receipts from deputation of technical manpower for such “on-site” software development abroad at the client’s place are eligible for deduction under sections 10A, 10AA and 10B.

Tax benefits under sections 10A, 10AA and 10B would continue to remain available in case of a slump-sale of a unit/undertaking provided that the slump sale would not result into any splitting or reconstruction of existing business.

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