Archive · 22 Jan 2026
Nasscom Seeks ESOP Tax Clarity and Cloud Tax Reforms in Budget
Nasscom, which represents many IT and tech companies in India, has some requests for the government's upcoming budget.
They want the budget to make it clearer how foreign companies using Indian data centers should be taxed.
They also want more startups to be able to delay paying taxes on employee stock options (ESOPs), which help attract good employees.
Additionally, they suggest reducing the amount of money companies have to pay upfront when they dispute a tax bill, to help them manage their money better.
Nasscom believes these changes will help the tech industry grow, especially with new opportunities in AI and a growing domestic market.
Nasscom seeks clarification on tax treatment for foreign cloud use of Indian data centres.
Proposes extending ESOP tax deferment to all DPIIT-recognised startups.
Suggests reducing the pre-deposit limit for disputed tax demands to 10%.
Advocates for the carry-forward of business losses and accumulated depreciation to all companies.
Highlights the importance of the data centre sector in driving digital and AI growth.
- Who
- Nasscom, an industry body representing IT companies and tech players in India
- What
- Proposals for tax reforms and clarifications in the Union Budget
- When
- Budget proposals submitted ahead of the Union Budget announcement
- Where
- India
- Why
- To address concerns around tax treatment of foreign cloud use, ESOP tax deferment, and working capital strain for tech firms
- Organisation
- Nasscom
- ESOP Tax Deferment
- Requested for all DPIIT-recognised startups
- Cloud Tax Clarity
- Clarification on foreign cloud use of Indian data centres
- Pre-deposit Limit
- Proposed reduction to 10% of disputed amount
- Data Centre Sector
- Drives digital and AI growth
- Startups in India
- Over 1,59,000 recognised by DPIIT
- Certified Startups
- Fewer than 4,000 have Inter-Ministerial Board certification
- Industry Revenue
- USD 280 billion in 2023, aiming for USD 300 billion
