While presenting her ninth Union Budget, Finance Minister Nirmala Sitharaman said the threshold for availing safe harbour for IT services will be raised substantially from Rs 300 crore to Rs 2,000 crore. Approvals will move to an automated, rule-driven process with no need for tax officer examination.

For companies seeking Advanced Pricing Agreements (APA), the process will be fast-tracked to two years, with a possible six-month extension. The facility of modified returns will also be available for associated entities entering APA.

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Also, software development services, IT-enabled services, knowledge process outsourcing services and contract R&D services will be clubbed under a single category Information Technology Services with a common safe harbour margin of 15.5% applicable to all.

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