In a huge relief to the IT industry, software companies have been allowed to enjoy benefits of the software technology parks of India (STPI) scheme for another year.

The government has extended the tax concessions under Section 10A of the Income-Tax Act to March 2010.

The scheme was to expire in March 2009 under the sunset clause provided in the scheme. On an average, IT companies would have a revenue benefit of at least 5-7 per cent (on the effective tax rate) because of this extension.

Normally, companies have about 50 per cent business located in the technology parks, export revenue from which is exempt from any kind of tax.