Information technology is by and large the only sector that can afford to pay higher taxes. The ongoing economic recession has adversely affected the fortunes of almost all other industries, but the IT sector has managed to beat the recession. One may argue that levying fresh taxes on a sector that is doing well and contributing significantly to the country's forex revenues is akin to punishing the sector for better performance. However, there is little strength in this argument for the government has, as and whennecessary, also announced sops for the industry which have contributed significantly to its well-being. Today, the industry has reached a level where it can do without these sops.

A minimum alternate tax will make little difference to the ever increasing bottomlines of software companies. In fact, it will only do good for the industry at large as it will help to discourage the entry of unscrupulous players who use software companies for money laundering. Stock markets tend to overreact and if all that is imposed on software companies is a minimum tax, a rally could once again set in as the impost can bring about little change in their otherwise bright prospects.