Software Technology Parks of India (STPI) is an autonomous society under the Ministry of Electronics and Information Technology (MeitY), set up to promote and facilitate software and IT-enabled services (ITES) exports. Any company exporting software — from a single-developer startup to a large services firm — can register a unit under the STP Scheme to access its export infrastructure and statutory clearances.
The Section 10A tax holiday has ended
The most common misconception about STPI is that registration still gives a 100% income-tax exemption on export profits. It does not. The tax holiday under Section 10A of the Income-tax Act, 1961 sunset on 31 March 2011 and was never extended. Units set up after that date pay corporate income tax at normal rates. Treat any advice promising a "Section 10A exemption" for a new STP unit as outdated — the real value of STPI today lies in its operational and duty benefits, not income-tax relief.
Benefits that still apply
- Duty-free imports of capital goods, hardware and software (including second-hand capital goods) against the export obligation.
- Customs-bonded warehouse status, so imported equipment can be stored and used without paying duty upfront; goods can later be de-bonded at depreciated value or re-exported.
- Softex certification — STPI is the designated authority that attests Softex forms. Banks cannot realise foreign-exchange remittances against software-export invoices without it, so this matters even for non-STP exporters.
- Single-window Green Card combining approvals from Customs, the Department of Telecommunications and other authorities.
- 100% FDI under the automatic route for IT/ITES units, plus deemed-export status on indigenous procurement.
STPI vs SEZ at a glance
| Parameter | STPI (STP Scheme) | SEZ |
|---|---|---|
| Governing authority | MeitY / STPI | Ministry of Commerce (SEZ Act, 2005) |
| Income-tax holiday | None (Section 10A ended 2011) | Section 10AA, but only for units that began operations by 30 June 2020 |
| Duty-free imports | Yes | Yes |
| Location | Any location; no minimum built-up area | Only inside a notified SEZ |
| Best suited to | Small and mid-size IT/ITES exporters, startups | Large export operations |
Registration and ongoing compliance
Apply online on the STPI portal with a project report, incorporation documents and projected export figures. On approval you receive a Letter of Permission/registration, execute the legal agreement and bond the premises, and must commence operations within the stipulated period. A unit has to maintain Positive Net Foreign Exchange (NFE) earnings and file periodic returns — Monthly Progress Reports (MPR), Quarterly Progress Reports (QPR) and an Annual Progress Report (APR) — alongside regular Softex filings.
Getting income-tax relief today
Since STPI no longer offers a tax holiday, founders wanting a direct income-tax benefit on export profits should look elsewhere. DPIIT-recognised startups can claim the Section 80-IAC deduction — 100% of profits for any three consecutive years within the first ten — for eligible companies or LLPs incorporated before 1 April 2030 with turnover up to ₹100 crore, subject to Inter-Ministerial Board approval. Software exports are also zero-rated under GST: units can export under a Letter of Undertaking (LUT) without paying IGST, or pay and claim a refund of input tax credit. In practice many exporters combine STPI registration (for Softex and duty benefits) with Startup India recognition (for the actual tax deduction).