Is Service Tax applicable to Software Development services in India ?

NO.The service tax is levied only on the notified services under the Finance Act 1994.The list of notified services is at the link below:
http://www.allindiantaxes.com/service-ta...
However, every year in the Budget number of services are brought under service tax net.So wait and watch for the Budget.

No.
Information Technology Services like designing, developing or maintaining of computer software, or computerized data processing or system networking, or any other service primarily in relation to operation of computer systems are not liable to service tax.

There is specific clarification in Explaination under the category of "Business Auxilliary Services" in Section 65 (19) (iv) of the Finance Act.

Information Technology Services like designing, developing or maintaining of computer software, or computerized data processing or system networking, or any other service primarily in relation to operation of computer systems are not liable to service tax.

There is specific clarification in Explaination under the category of "Business Auxilliary Services" in Section 65 (19) (iv) of the Finance Act.

Therefore servicetax is not applicable for software development servises.