This is a question that almost every CS or IT engineer gets at some time. He shrugs off quickly saying, why bother.
India has seen a boom in IT (not CS) jobs in the past 20 years. I still remember my BE 3rd year days (1999) when I was in the CSE stream and was very confident and happy because I was sure my stream would attract the best employment. In those days, IT was a rare. CS grads were hired for applied jobs like programming, systems, networking and so on. Hardly, any of my friends moved on to work on theoretical computer science. We never used automata to model anything. We never did model checking in our life. We never used formal languages. Designing new programming languages or improving the algorithms behind a data base system were things that we considered beyond our reach or imagination. Even though we called ourselves CS engineers, we were only applying our CS knowledge to practical use by building software. We were not extending the “science” behind computer science. Over a period of time, people saw that it is inappropriate to call what we do as CS. So, they started this branch “IT”. With so much jobs, they even found a need to establish new “Indian Institutes” for “Information Technology”. That led to the present day IIITs. The idea was to provide the same quality of education as IITs in every state focused on IT jobs.
So, in essence, if you are not so much interested in the science behind CS, IT is the best stream for you. Entry level jobs in the IT and ITES industries (software development) would not distinguish between CS and IT. Taking IT will infact be more appropriate for these jobs because it will cut down few theoretical subjects from your list which they argue that you will never need to know.
If you choose to turn to research, you will now find yourself at a slight disadvantage especially if you become allergic to theoretical computer science. So, if you have MS or PhD aspirations, think again. It does not preclose your opportunities. You just need to work much harder to enter few streams. That said, research in Information Security, Information Retrieval, and such fields are open for IT engineers.
At the end of the day, I have learned that, the way to survive in this complicated world is to be very neatly organized. You need to simplify every step in your life. BE (CS), MS (CS), PhD (CS) sounds much simpler compared to BE (IT) MS (CS) PhD (Mathematics). Believe, such people, exist too! So, choose a specialization based on your ability to marry it for life. Do not keep a plan B to change it. My profile looks like BE (CSE), MS (IT) and PhD (CSE). My PhD is in Information Retrieval. But, it is just that there are not many institutions giving PhD in IT. Also, my work is becoming more and more theoretical. So, I do not mind.
Sorry for a long answer again. But, in essence, it matters only if you are a Math lover (and also allergic to programming) and you are interested in theoretical side of computer science. If that is the case, go for CS. If not, IT is fine.