Budget 2026: Tax holiday For Foreign Cloud Service Companies Till 2045
The proposal includes an exemption until the year 2045, with the Finance Minister clarifying that it applies to global companies operating through partnered entities from India.
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Finance Minister Nirmala Sitharaman today announced a proposal for a ‘Tax holiday’ for foreign companies providing cloud services to India.
The proposal includes an exemption until the year 2045, with the Finance Minister clarifying that it applies to global companies operating through partnered entities from India.
Ahead of Budget 2026, industry body Nasscom had urged the government to provide regulatory clarity for foreign cloud service providers using Indian data centres to prevent them from being deemed as having a “permanent establishment” (PE) and facing unintentional tax liabilities.
Amit Kumar Tyagi, CEO, TrueReach AI, said that by proposing a tax holiday until 2047 for cloud services using Indian data centers and utilizing the INR 10,300 crore IndiaAI Mission to provide compute at a subsidized rate, the government has eliminated the cost barriers to high-end innovation.
“This aligns perfectly with our ‘Entropy’ platform, which already automates 90 per cent of the SDLC. With the government targeting a 10 per cent share of global services by 2047, we are no longer just an outsourcing hub; we are becoming an ‘AI Factory’ hub. The FM’s focus on Sovereign LMMs and the 38,000-GPU strong compute base ensures that Indian startups can now build production-grade, autonomous software 10x faster, allowing us to take ‘Made in India’ intelligence to the global stage with unprecedented scale,” said Tyagi.
Finance Minister Nirmala Sitharaman today announced a proposal for a ‘Tax holiday’ for foreign companies providing cloud services to India.
The proposal includes an exemption until the year 2045, with the Finance Minister clarifying that it applies to global companies operating through partnered entities from India.
Ahead of Budget 2026, industry body Nasscom had urged the government to provide regulatory clarity for foreign cloud service providers using Indian data centres to prevent them from being deemed as having a “permanent establishment” (PE) and facing unintentional tax liabilities.
Amit Kumar Tyagi, CEO, TrueReach AI, said that by proposing a tax holiday until 2047 for cloud services using Indian data centers and utilizing the INR 10,300 crore IndiaAI Mission to provide compute at a subsidized rate, the government has eliminated the cost barriers to high-end innovation.
“This aligns perfectly with our ‘Entropy’ platform, which already automates 90 per cent of the SDLC. With the government targeting a 10 per cent share of global services by 2047, we are no longer just an outsourcing hub; we are becoming an ‘AI Factory’ hub. The FM’s focus on Sovereign LMMs and the 38,000-GPU strong compute base ensures that Indian startups can now build production-grade, autonomous software 10x faster, allowing us to take ‘Made in India’ intelligence to the global stage with unprecedented scale,” said Tyagi.
