Budget 2026: In a massive update for taxpayers, Finance Minister Nirmala Sitharaman has announced Tax holiday till 2047 to any foreign company that provides cloud services by setting up data centres in India. In the recent Budget speech, the Finance Minister Nirmala Sitharaman proposed tax holiday till 2047 for foreign companies that provide cloud services to customers worldwide by using data centres in the country. Here are all the details you need to know about what the Nirmala Sitharaman said in her budget speech about tax holidays.
What is Tax Holiday announced by Nirmala Sitharaman?
The tax holiday will be extended to the entities concerned subject to certain conditions. In the Union Budget 2026-27 speech, Sitharaman said there is a need to enable critical infrastructure and boost investment in data centres.
What Finance Minister said on Tax holidays?
“I propose to provide tax holiday till 2047 to any foreign company that provides cloud services to customers globally by using data centre services from India,” the minister said. To avail the tax holiday, companies need to provide services to Indian customers through an Indian reseller entity.
“Recognising the need to enable critical infrastructure and boost investment in data centres, I propose to provide tax holiday till 2047 to any foreign company that provides cloud services to customers globally by using data centre services from India. It will, however, need to provide services to Indian customers through an Indian reseller entity,” the Finance Minister said in her Union Budget 2026-27 speech Sunday.
Big announcement on data centre services from India
“I also propose to provide a safe harbour of 15% on cost in case the company providing data centre services from India is a related entity,” she added. Among other proposals, the government will set up National Institute of Hospitality by upgrading existing National Council for Hotel Management and catering technology.
What is a Tax Holiday?
Getting to the basics, a tax holiday is a temporary government-enforced reduction or elimination of taxes, such as income, property, or sales tax, designed to stimulate economic growth, encourage investment in specific industries, or boost consumer spending.
