Clarification regarding allowability of deduction under section 10A/10AA on transfer of Technical Man-power in the case of software industry.

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..... wability of deduction under section 10A / 10AA on transfer of Technical Man-power in the case of software industry. Section 10AA of the Income-tax Act, 1961 , inter-alia, provides for deduction in respect of the profits derived by a unit set up in SEZ from export of computer software or from providing any ITES services. The said deduction available to a new SEZ unit is subject to certain .....

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..... per of skilled, talented and experienced manpower with domain knowledge. Given the highly technical and competitive nature of software development, some technical persons having prior experience are required to manage the critical functions of software development in a new unit. It has thus been submitted that movement of technical manpower from an existing unit to a new SEZ unit should not be a c .....

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..... p or reconstruction of an existing business, provided the number of technical manpower so transferred does not exceed 20 per cent of the total technical manpower actually engaged in developing software at any point of time in the given year in the new unit. 5. This Circular shall be applicable only in the case of assesees engaged in the development of software or in providing IT Enabled Service .....

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