– Tax incentives must be tied to enhancements in cybersecurity defenses
– Granting industry status for cybersecurity
– Reducing GST on security products and services is essential
As the Indian government readies to present the Union Budget, the importance of cybersecurity cannot be overstated, especially in light of the escalating frequency of cyberattacks, threats, and ongoing digital transformation efforts. ETCIO reached out to cybersecurity professionals advocating for heightened budgetary provisions aimed at bolstering national cybersecurity frameworks, boosting threat intelligence abilities, and refining incident response strategies.
“Given the recent surge in cyberattacks, it would be beneficial if tax incentives were correlated with advancements in cyber defense readiness,” asserts Agnidipta Sarkar, Vice President CISO Advisory, ColorTokens Inc., and former CISO of the Biocon group.
Governments provide a variety of tax incentives, like credits, deductions, and subsidies, to stimulate particular economic activities or sectors. By leveraging these incentives, businesses can significantly decrease their tax obligations, with options ranging from sections 80C to 80u, encompassing research and development tax credits, green energy incentives, or various investment-related deductions.
Tax credits dedicated to cybersecurity investments represent a compelling initiative. These government-issued credits promote corporate investments in cybersecurity measures by providing financial relief or deferred tax obligations for organizations that safeguard their sensitive data against cyber threats. Additional incentives could also target India-based cybersecurity startups utilizing artificial intelligence to develop innovative cybersecurity solutions, he elaborates.
Imran Iraqi, another prominent figure in the cybersecurity realm, has compiled a list of considerations for the government to prioritize in its cybersecurity agenda:
- Reduction of GST on security goods and services
- Encouragement of domestic security product manufacturing through the Make in India initiative
- Allocation in the budget for cybersecurity education within the National Skills Development / Skill India Program, ensuring that cybersecurity skills and career prospects reach broader sections of rural and semi-urban populations
- Establishment of cybersecurity product and service export zones with an emphasis on innovation
- Creation of startup incubation centers to stimulate industry growth
- The granting of industry status to the cybersecurity sector
According to Ashok Hariharan, CEO & Co-Founder of IDfy, there are three critical areas deserving focus in the realm of cybersecurity.
- Investment and support for AI initiatives—particularly in multimodal AI models—alongside tax incentives for strategic investments in SLM/LLM and computer vision frameworks.
- Support for startups, particularly in the form of long-term capital support for deep tech ventures. The current capital landscape often deprives deep innovation of necessary funding, as venture capitalists typically favor short-term returns.
- Reform of tax policies and incentives aimed at fostering innovation and supporting professionals within these organizations—specifically, reconsidering tax implications concerning ESOPs by deferring tax payments to the point of sale rather than at the share exercise stage.
