Ms. Mythili P., CFO, Amtex Systems, Chennai

On the Business Front:
1) Continuation of STPI benefits - The benefits extended to 100% Export Oriented Undertakings U/s 10B would be withdrawn from the financial year beginning 01.04.2011. SMEs who are already reeling under the impact of recession will be worst affected due to this. This exemption needs to be extended at least for another year.
2) At present, the minimum land requirement for setting up a SEZ unit is 25 acres for IT industry. This is beyond the capacity of SME companies in the IT sector and should be brought down to 5 acres.
3) A draconian measure was introduced in the Finance Act 2009 by way of increasing the MAT rate to 15% from 10% when the companies were reeling under recession. It should be brought down to 10% at least, in the upcoming budget to provide some succor for IT SMEs.
4) There should be some quota for IT SMEs in the government’s IT/e-governance projects, say for example 10% and machinery should be setup to monitor the same. This would provide an immense boost to this segment and would contribute in their recovery from recession.
5) As there is a mechanism for raising Quasi-equity for Infrastructure companies, there should similar mechanism for raising subordinated debit for IT SMEs.
6) The tax rates and tax blocks should be aligned with Direct Taxes code and special consideration should be given for IT SMEs in respect of Gross Assets Tax proposed to be levied as an alternative to the present Minimum Alternate Tax.
7) Tax audit limit to be raised to INR 10 million. This would help small companies to reduce their compliance cost.

On the Employee Front:
1) Basic Exemption Limit should be increased at least to INR 5 lakhs as last year budget itself did not do justice to the middle and lower-middle income group.
2) There is an anomaly in the perquisite provisions treating a person in receipt of INR 50 thousand per annum as a “specified employee”. Considering the cost of living today, even sub-staff would be specified employees under this Act. It should be brought to the level of INR 1.2 lakhs per annum as per the scale fixed by the ESI Act.
3) The present method of taxing ESOP should be abolished as it involves impractical valuation methods and it cannot be opted as employee retention strategy for Small and Medium companies as their shares are not listed.
4) The upper limit under Section 80C of IT Act has not seen a change over several years. This needs to be revised upwards to INR 1.5 lakhs at the least.
5) The cost of medical treatment has sky rocketed as the medical industry has become highly commercialized and is charging exorbitant rates. Hence, the present ceiling of INR 15 thousand towards medical reimbursement should be revised upward to at least INR 25 thousand.

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Brief profile of Ms. Mythili P. Ms. Mythili, presently working as the CFO at Amtex Systems, Chennai is the Honorary Secretary for the IT SME Association, a qualified CISA professional and a fellow member at the Institute of Chartered Accountants. She is a gold medalist in Economics and has a rich work experience of 15 years from varied sectors such as Automotive, ISP, Food & Beverages, Manufacturing, Financial Services Company and IT/ITeS.