Maharashtra Services Sector Policy 2025: Subsidies for IT and BPO Companies

Maharashtra contributed over ₹3.5 lakh crore to India's IT/ITeS export revenue in FY 2024-25, second only to Karnataka. The state houses 33% of India's total IT workforce, with Pune and Mumbai ranking among the top 5 IT employment hubs globally. Recognizing this dominance, the Maharashtra government updated its services sector incentive framework in 2025, extending and enhancing subsidies for IT, BPO, KPO, and data centre companies across all 36 districts. The updated policy offers EPF reimbursement of up to 100% for 5 years, 100% stamp duty exemption in 28 districts, electricity duty waivers for up to 10 years, and capital subsidies reaching 30% of fixed investment in less-developed regions. This guide breaks down every subsidy, eligibility criterion, application process, and compliance requirement that IT and BPO companies need to know to claim these benefits in 2025.

What is the Maharashtra Services Sector Policy 2025?

The Maharashtra Services Sector Policy 2025 is the state government's consolidated incentive framework for companies operating in IT, ITeS, BPO, KPO, data centres, animation, visual effects, game development, and cloud computing. It builds on the Maharashtra IT/ITeS Policy 2023 and integrates incentives from the Package Scheme of Incentives (PSI) 2024, creating a single policy window for services sector enterprises.

The policy operates through the Department of Information Technology and the Directorate of Industries, Maharashtra. It classifies the state's 36 districts into 5 area groups (A, B, C, D, and D+/No Industry Districts) and assigns progressively higher subsidies to less-developed regions. Group A covers the Mumbai Metropolitan Region and Pune. Group D+ and No Industry Districts cover the most underserved areas like Gadchiroli, Washim, Hingoli, and Nandurbar, where the government offers the highest incentive packages to attract IT investment.

The policy's stated objective is to generate 5 lakh new IT/BPO jobs by 2028 and increase Maharashtra's share of India's IT exports from 33% to 40%. It targets three specific outcomes: decentralizing IT employment beyond Mumbai and Pune, attracting Global Capability Centres (GCCs) from multinational corporations, and supporting domestic IT startups with reduced operational costs during their first 3 to 5 years of operation.

Eligible Companies and Activities

Not every technology company qualifies for these subsidies. The policy defines 12 eligible service activities that can claim incentives, and each company must register its primary activity with the Directorate of Industries before applying.

To qualify, a company must hold a valid Private Limited Company or LLP registration, possess Udyam/MSME registration, and maintain an active GST registration. Sole proprietorships and partnership firms without LLP status are not eligible for the capital subsidy and IPS components, though they can claim stamp duty and electricity duty exemptions.

EPF Reimbursement for IT and BPO Companies

The EPF reimbursement is the most impactful subsidy for labour-intensive BPO and IT services companies. Maharashtra reimburses 100% of the employer's EPF contribution, which equals 12% of basic wages for every new employee, directly to the company's bank account on a quarterly basis.

The reimbursement duration depends on the company's area classification. Units in Group A locations (Mumbai, Thane, Pune, Pimpri-Chinchwad, and Raigad) receive reimbursement for 3 years. Units in Group B and C locations receive it for 4 years. Units in Group D, D+, and No Industry Districts receive the maximum duration of 5 years per employee from their date of joining.

For a BPO company with 200 employees at an average basic wage of ₹18,000 per month, the EPF reimbursement works out to ₹2,160 per employee per month, or ₹51.84 lakh per year for the entire workforce. Over 5 years in a Group D location, this single subsidy is worth over ₹2.59 crore. This calculation explains why companies like Infosys, TCS, and WNS have expanded BPO operations into Nagpur, Nashik, and Aurangabad rather than concentrating entirely in Pune.

To claim EPF reimbursement, the company must file quarterly claims on the MAITRI portal with EPF challan receipts, employee joining letters, and Form 5A (new member registration). The Directorate of Industries verifies employment data against EPFO records and disburses the reimbursement within 45 working days of each quarterly claim.

Stamp Duty and Registration Fee Exemptions

Stamp duty on property purchase or lease is a major upfront cost for IT companies setting up physical offices. Maharashtra charges standard stamp duty of 5% to 6% on property transactions, depending on the municipal area. The services sector policy exempts IT/BPO units from this cost partially or fully based on their location.

Units in Group C, D, D+, and No Industry Districts receive 100% stamp duty exemption on purchase or lease of land and buildings used for IT/BPO operations. Group B areas (Nashik, Aurangabad, Kolhapur, Nagpur corporation limits) receive 75% exemption. Group A areas receive exemption only when the unit is located within a designated IT park, IT SEZ, or MIDC IT zone.

The exemption applies to the initial property transaction and one subsequent expansion within 5 years of the original registration. For a company leasing a 10,000 sq ft office in Nagpur at ₹35 per sq ft with a 9-year lease valued at ₹3.78 crore, the stamp duty exemption saves ₹18.9 lakh to ₹22.68 lakh in a single transaction. The company must submit the registered lease deed and IT activity registration certificate to claim this exemption at the Sub-Registrar's office.

Electricity Duty Exemption

Electricity costs represent 8% to 15% of total operating expenses for data centres and 3% to 6% for standard IT/BPO offices. Maharashtra levies electricity duty at a rate of ₹0.30 to ₹1.50 per unit depending on the consumer category and voltage level. The services sector policy exempts eligible IT units from this duty entirely.

IT/BPO units in Group A and B locations receive 100% electricity duty exemption for 7 years from the date of commercial operations. Units in Group C, D, D+, and No Industry Districts receive exemption for 10 years. Data centres, which consume significantly more power per square foot than standard IT offices, benefit disproportionately from this incentive.

A mid-sized data centre consuming 500 KVA with an average electricity duty of ₹0.80 per unit saves approximately ₹8.4 lakh to ₹12 lakh annually under this exemption. Over a 10-year period in a Group D location, the cumulative saving reaches ₹84 lakh to ₹1.2 crore. To claim the exemption, the company files an application with the local electricity distribution company (MSEDCL or Tata Power) along with the IT activity registration certificate and MAITRI portal approval letter.

Capital Subsidy and Investment Incentives

The capital subsidy compensates IT/BPO companies for a percentage of their fixed capital investment in land, building, plant, machinery, and IT infrastructure. This is a one-time subsidy disbursed after the company completes its investment and commences operations.

For a BPO company investing ₹2 crore in fixed capital in Nagpur (Group B), the capital subsidy amounts to ₹30 lakh (15% capped at ₹30 lakh). The same investment in Gadchiroli (D+/No Industry) yields ₹60 lakh (30%), capped at the ₹1 crore maximum. Eligible fixed capital includes land, building construction or leasehold improvements, servers, networking equipment, UPS systems, office furniture, and software licenses with a useful life exceeding 3 years.

The capital subsidy application must be filed within 12 months of commencing commercial operations. Submit a CA-certified fixed asset register, original purchase invoices, bank statements showing payment trails, and the MAITRI portal registration acknowledgment. Disbursement takes 60 to 90 working days after verification by the District Industries Centre.

Industrial Promotion Subsidy: Net SGST Refund

The Industrial Promotion Subsidy (IPS) is the largest single incentive by value for established IT/BPO units generating consistent revenue. Under IPS, Maharashtra refunds a percentage of the net State GST (SGST) paid by the IT unit back to the company annually. The refund percentage and duration depend on the area classification.

Group A units receive a 40% SGST refund for 7 years. Group B units receive 50% for 7 years. Group C units receive 70% for 10 years. Group D units receive 80% for 10 years. D+ and No Industry Districts receive 100% SGST refund for 10 years, effectively making the state GST component zero for the first decade of operations.

For an IT company billing ₹10 crore annually with 18% GST (9% CGST + 9% SGST), the SGST component is ₹90 lakh per year. A Group D unit receiving 80% IPS gets back ₹72 lakh annually for 10 years, totalling ₹7.2 crore in cumulative refunds. This incentive makes Maharashtra's effective tax burden lower than most competing states for IT companies in non-metro locations.

IPS claims are filed annually through the MAITRI portal after filing all GST returns for the financial year. The company must submit audited financials, GSTR-9 annual return, and a CA certificate confirming the net SGST liability. The subsidy amount is cross-verified against the GST portal data and disbursed within 90 working days.

Special Incentives for Tier 2 and Tier 3 Cities

Maharashtra's policy deliberately favours IT/BPO setup in cities beyond Mumbai and Pune. The incentive differential between Group A (metro) and Group D+ (rural/underserved) locations is substantial, and this gap is by design. The government wants to decentralize IT employment, reduce pressure on metro infrastructure, and create high-paying jobs in districts with lower living costs.

Beyond the standard subsidies (which already scale by area group), Tier 2 and Tier 3 cities offer 4 additional incentives not available in Group A locations:

• Rent subsidy: Up to ₹10 per sq ft per month for IT startups operating from incubation centres, co-working spaces, or designated IT parks. Available for 3 years, capped at 3,000 sq ft per company.
• Skill development grant: ₹5,000 per employee for training and certification costs. Available for up to 100 employees per company per year.
• Power tariff subsidy: Reduced industrial power tariff of ₹5 per unit (vs ₹8 to ₹10 per unit in metro areas) for IT/BPO units in Group D and D+ areas.
• Land allotment priority: IT/BPO companies get priority allocation in MIDC industrial plots at concessional rates, with a 25% discount on MIDC plot premiums in Group C and D areas.

The combined effect is significant. An IT company with 100 employees, ₹1 crore in annual revenue, and ₹50 lakh in fixed capital investment saves approximately ₹35 lakh to ₹55 lakh more per year by operating from Nagpur or Aurangabad compared to Pune. Over 5 years, this adds up to ₹1.75 crore to ₹2.75 crore in additional savings, not counting the 30% to 40% lower salary benchmarks and 50% lower commercial real estate costs in these cities.

Key IT Hubs and Infrastructure in Maharashtra

Maharashtra's IT infrastructure extends well beyond the Hinjewadi-BKC corridor. The state has invested in dedicated IT parks, SEZs, and MIDC zones across 8 cities, each with ready-to-occupy infrastructure, reliable power supply, and broadband connectivity.

Pune remains the largest IT hub with Hinjewadi IT Park (phases I through V), Magarpatta Cybercity, Kharadi IT Park, and EON IT Park collectively housing over 6 lakh IT professionals. Pune accounts for 42% of Maharashtra's IT exports. Mumbai anchors the financial technology and media technology sectors through SEEPZ SEZ, Bandra-Kurla Complex, Goregaon IT Hub, and Airoli Knowledge Park in Navi Mumbai.

Nagpur is emerging as the state's third IT hub through MIHAN SEZ (Multi-modal International Hub Airport at Nagpur), which houses Infosys, TCS, and HCL campuses. The city offers Group B classification with 75% stamp duty exemption and 4-year EPF reimbursement. Nashik and Aurangabad (Chhatrapati Sambhajinagar) each have MIDC IT parks with occupied capacity growing at 15% to 20% annually since 2022.

The state government has also initiated plug-and-play IT workspace projects in 12 district headquarters, offering fully furnished 50 to 500 seat office spaces at subsidized rental rates. These workspaces target BPO companies and remote delivery centres for large IT firms looking to access talent pools in smaller cities without the capital expenditure of building custom offices.

How to Apply Through the MAITRI 2.0 Portal

All subsidy applications under the Maharashtra Services Sector Policy are processed through the MAITRI 2.0 portal (Maharashtra Industry, Trade and Investment Facilitation Cell), which replaced the earlier manual application system in February 2025. The portal consolidates applications for all 6 subsidy categories into a single digital workflow.

Here is the step-by-step application process:

1. Register on MAITRI 2.0: Create an account using your company's PAN and GST number. Link your Udyam registration and CIN (Corporate Identification Number). This takes 15 to 20 minutes.
2. Submit Eligibility Application (Form A): Declare your IT/BPO activity, area classification, proposed investment, and employment targets. Upload Certificate of Incorporation, Udyam registration, and project report.
3. Obtain Eligibility Certificate (EC): The District Industries Centre verifies your application within 15 working days and issues an EC if approved. This certificate is mandatory before claiming any subsidy.
4. Commence Operations and Maintain Records: Start your IT/BPO operations, hire employees, complete capital investment, and maintain all financial records with supporting invoices.
5. File Subsidy Claims (Form B): Submit quarterly claims for EPF reimbursement, annual claims for IPS (SGST refund), and one-time claims for capital subsidy and stamp duty exemption. Each claim requires supporting documentation and a CA certificate.
6. Receive Disbursement: Approved claims are disbursed directly to the company's bank account. EPF claims take 45 working days, capital subsidy takes 60 to 90 working days, and IPS takes 90 working days after claim submission.

Maharashtra vs Other States: IT/BPO Incentive Comparison

IT companies choosing a state for their next office or delivery centre need to compare incentive packages across competing states. Here is how Maharashtra's Tier 2 city incentives stack up against Karnataka, Telangana, Uttar Pradesh, and Tamil Nadu for a mid-sized IT/BPO unit with 200 employees and ₹3 crore in fixed capital investment.

Maharashtra's advantage lies in the combination of long-duration incentives (10-year electricity and SGST refund periods), a mature IT talent ecosystem, and proximity to Mumbai's financial markets. Telangana wins on processing speed with its 15-day TS-iPASS clearance. Uttar Pradesh offers aggressive capital subsidies but has a smaller IT talent pool outside Noida. Karnataka's Bengaluru remains the default choice for companies prioritizing talent density over cost incentives.

For BPO operations with 500+ seats, Maharashtra's 5-year EPF reimbursement in Tier 2 cities delivers the highest labour cost savings among all 5 states. For GCCs with heavy infrastructure investment, Telangana's 100% SGST refund for 7 years is more competitive for high-revenue, lower-headcount operations. The right choice depends on your company's cost structure: labour-heavy operations favour Maharashtra, capital-heavy operations favour Telangana or UP.

Mega Project Incentives for Large IT Investments

IT companies investing above ₹100 crore in fixed capital or creating more than 1,000 jobs receive customized mega project incentive packages approved directly by the State High-Level Committee chaired by the Chief Secretary. These packages go beyond standard PSI benefits and are negotiated on a case-by-case basis.

Mega project incentives typically include 100% stamp duty exemption regardless of area classification, accelerated IPS disbursement (monthly instead of annual), dedicated power infrastructure with captive generation rights, government land at concessional rates through MIDC, and fast-tracked environmental and building clearances. Companies like Infosys (₹750 crore Nagpur campus), Wipro (₹500 crore Pune expansion), and Tech Mahindra (₹300 crore Navi Mumbai facility) have received customized packages under this provision.

To apply for mega project status, submit a detailed investment proposal through the MAITRI portal with projected timelines, employment generation plans, and technology focus areas. The High-Level Committee reviews proposals within 45 working days and issues a customized Letter of Intent specifying the exact incentive package. The approval includes milestone-linked disbursement conditions: 30% of capital subsidy on land acquisition, 40% on building completion, and 30% on full employment ramp-up.

Interest Subsidy on Term Loans

IT and BPO companies taking term loans from scheduled banks or financial institutions for setting up or expanding their Maharashtra operations can claim an interest subsidy of 5% to 7% on the loan interest rate, depending on their area classification.

Group A and B locations receive a 5% interest subsidy. Group C and D locations receive 6%. D+ and No Industry Districts receive the maximum 7% interest subsidy. The subsidy is capped at ₹50 lakh per year for standard projects and ₹1 crore per year for mega projects. It is available for 5 years (Group A/B) to 7 years (Group D/D+) from the date of first loan disbursement.

For a company taking a ₹5 crore term loan at 10% interest in a Group D area with a 7% interest subsidy, the effective interest rate drops to 3% per annum, saving ₹35 lakh in interest costs annually. Over 7 years, the cumulative interest saving exceeds ₹2.45 crore. The subsidy is claimed quarterly by submitting loan account statements, interest payment receipts, and a bank certificate confirming the interest rate and outstanding balance.

Both Private Limited Companies and LLPs can claim the interest subsidy. The term loan must be used exclusively for fixed assets related to the IT/BPO operation. Working capital loans, overdraft facilities, and unsecured loans do not qualify. Refinanced loans qualify only if the original loan was sanctioned after the company obtained its MAITRI Eligibility Certificate.

Compliance Requirements After Claiming Subsidies

Claiming subsidies creates binding obligations. Maharashtra's Directorate of Industries monitors subsidized IT/BPO units through quarterly employment audits, annual financial reviews, and periodic physical inspections. Non-compliance triggers subsidy clawback with 12% simple interest from the date of disbursement, and the company is blacklisted from future state incentives for 5 years.

Here are the 6 ongoing compliance requirements every subsidized IT company must maintain:

1. Employment maintenance: Maintain at least 80% of the declared employment level throughout the incentive period. A BPO that received EPF reimbursement for 200 employees must keep at least 160 on payroll at all times.
2. Quarterly MAITRI reports: File employment status, EPF payment receipts, and operational updates on the MAITRI portal within 30 days of each quarter-end (April, July, October, January).
3. Annual audited financials: Submit audited financial statements and a CA-certified compliance certificate within 6 months of each financial year-end.
4. Fixed asset retention: Retain all subsidized fixed assets for a minimum of 5 years from the date of capital subsidy disbursement. Disposing of subsidized assets before this period requires prior written approval from the DIC.
5. Physical inspections: Allow inspection by DIC officers at least once annually. Inspections verify employee headcount, asset presence, and operational status of the IT/BPO facility.
6. GST and statutory compliance: Maintain active GST registration, file all statutory returns on time, and pay all taxes including TDS, professional tax, and MLWF contributions. Any GST default triggers automatic suspension of IPS claims.

Setting up an IT or BPO company in Maharashtra involves registering the entity, obtaining 4 to 6 certificates and registrations, filing the MAITRI eligibility application within 30 days, and then maintaining quarterly compliance for 5 to 10 years. Missing a single deadline or filing can reduce your subsidy value by 10% or disqualify you entirely.

IncorpX provides end-to-end support for IT companies establishing operations in Maharashtra. Our registration package covers company incorporation (7 to 10 working days), GST registration (3 to 5 working days), Udyam/MSME registration (same day), and DPIIT Startup India recognition (2 to 5 working days). Our compliance team then handles the MAITRI portal eligibility application, quarterly EPF reimbursement claims, annual IPS filing, capital subsidy documentation, and all statutory filings required to maintain your subsidy eligibility.

Maharashtra offers the most comprehensive subsidy package for IT and BPO companies among India's major states, but the value you extract depends entirely on how quickly you register, how accurately you file claims, and how consistently you maintain compliance. Every month of delay in filing the MAITRI eligibility application costs you one month of EPF reimbursement, electricity duty exemption, and IPS eligibility. The companies that capture the full subsidy value are the ones that get their paperwork right from day one and maintain it without gaps for the entire incentive period.