new delhi pc seems to have hit the it and bpo industry hard with his proposal to tax 1122 per cent of the adjusted book profits as minimum alternative tax mat this indias it majors such as infosys tcs and aricent said could knock off as much as 15 to 2 per cent of their bottomline whereas wipro and hcl technologies said will at best have a marginal impactthough the proposals sent the software and bpo industry into a tizzy and utter confusion prevailed until well after the union budget experts said mat may not be as ominous as the industry fears it to be however 15 of infosys net income means several hundred crore being shaved off its balance sheet and thats bad newsbad enough to the extent that most it industry captains including the industrys lobbying association nasscom went into a huddle and were not willing to immediately comment on the union budget before having assessed its full impactthe selfanointed sunshine industry was not expecting a strike like that and this has made the industry captains who otherwise go on a pr overdrive singing paeans for the finance minister very quiet and inaccessible to the media one thing that emerged loud and clear though was that mat could put the it poster boys on the mat trying to fight it hard through intensive lobbying over the next few weeksaccording to infosys chief financial officer cfo v balakrishnan the impact would be substantial for the industry but a little less for us as we pay slightly higher withholding tax in most key overseas markets such as the us and europe and enjoy double taxation credit the net negative impact for infosys therefore would be about 15 of our total net incomethough wipro and hclt spokespersons put up a brave front and claimed the impact would be marginal a tcs spokesperson woefully acknowledged that mat extension to it sector would mean big erosion in profitability of the companyhowever stock markets didnt need anybody to tell them that the imposition of mat on it sector indicated that the blueeyed boys would not continue to get the favourite treatment forever though the markets largely thumbed down the budget with the bse sensex sliding 500 points close of the day it stocks particularly of top majors like tcs down 6 infosys 5 wipro 734 hclt 10 and satyam 98 were reserved for special hammeringexperts warned that the situation is unlikely to ease in the short term and software stocks could be in for some heavy selling unless the government sends some kind of a clarification that the software companies hadnt gone out of favourin his budget speech fm chidambaram has said he would extend mat to firms claiming deductions under sections 10a and 10b of the income tax act which is what the it industry has been allowed to do all these years the industry was expecting an extension of taxfree benefits which they presently get under the software technology