Foreign institutional investors (FIIs) may not have to pay minimum alternate tax (MAT) on capital gains made by them prior to April 1, 2015. The government is considering giving relief to FIIs from MAT, an official source said here.
“The AP shah committee had recommended giving relief to FIIs from MAT. The government is favourably considering it,” the official added. The development comes amid the Sensex at the Bombay Stock Exchange (BSE) registering a slump of 1.5 per cent on FRiday while the rupee fell sharply to hit a new two-year low of 65.9 against the dollar.
The AP Shah panel was formed following an uproar of the global investors when the income tax department sent notices to 68 FIIs demanding Rs 602.83 crore for paying up MAT on the book profits made by them up to March 31, 2015. “The Shah committee had submitted its report on July 24 and there were few issues which needed further clarity. So finance minister met Justice Shah. The committee suggested relief for the FIIs,” the official added.
In an attempt to assuage fears of foreign investors, the government had formed the panel and the income tax department had directed its officials to put on hold issuance of fresh notices and any further assessments on levy of this tax on FIIs. Earlier the finance ministry had said that the recommendations of the committee will be given due weightage.