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Post Budget Scenario

Telecom

Budget Offers
There has been a demand from telecom operators' side for extension in tax holidays for another five years, Sinha has granted it. Service tax imposed on telecom ervices like telex and leased line services Dividend tax has been reduced to 10%

The Impact
The extension of tax holiday for telecom service providers would facilitate these telecom companies to enhance their infrastructure and build additional capacities. Service tax on telex and leased lines at the rate of 5% is expected to affect companies like VSNL, MTNL and private telecom companies like Bharti as their effective tax rate is expected to increase in FY02. This would enable these companies to augment capacity.