30 Years Of Covering Mumbai
Home > Business > Clarity On Applicability Of MAT On FPIs Likely In Budget

Clarity On Applicability Of MAT On FPIs Likely In Budget

Thursday, February 12, 2015
By A Business Reporter

Finance Minister Arun Jaitley is likely to clear the air about applicability of Minimum Alternate Tax (MAT) on Foreign Portfolio Investors (FPIs) in the Budget to be unveiled on February 28. The issue of levying MAT on FPIs cropped up with the Income Tax department issuing notices to certain FPIs asking them why they should not be subjected to MAT.

According to sources, the I-T department's move could have an adverse bearing on portfolio investments unless some clarification is issued by the Finance Minister. MAT is levied on all profit-making companies at the rate of 20%. It was introduced by the government in 1980s to bring into net the companies which were not paying any taxes.

The "Income Tax department has sent letters to a number of FPIs asking them to explain why they should not be liable to MAT," a source told PTI. According to experts, there is no clarity about applicability of MAT on FPIs and it is felt that imposition of the levy could have a bearing on foreign portfolio fundings in the Indian stock market. "The Budget should clarify the government's position on applicability of MAT to FPIs, else it may result into another long drawn dispute and litigation," said Vikas Vasal, Partner, Tax, KPMG (India).

Vasal further said that there is a strong view that the foreign companies are not liable to maintain books of accounts in India and hence MAT is not applicable to them, therefore, FPIs are not liable to pay MAT. FPIs encompass all foreign institutional investors (FIIs), their sub-accounts and Qualified Foreign Investors (QFI) under a new regime that came into force on June 1, 2014. Overseas investors have pumped in more than Rs 45,000 crore (USD 7.35 billion) so far in 2015.

No Comments Posted
City news
A whistle-blower who claims to know about it ...
Dawood aide Chhota Shakeel says the fugitive and ...
Children of CSWs of Kamathipura are out of ...
My wife and I have been having a very disturbing
Dr. Rajan B. Bhonsle, M.D. (Bom)
Consulting Sex Therapist & Counsellor
Dr. (Mrs.) Minnu R. Bhonsle, Ph.D.
Consulting Psychotherapist & Counsellor
Select Sun sign:
Aries (Mar 21 - Apr 20)
Aries (Mar 21 - Apr 20)You will have to make a strong concerted effort in managing problem issues. You will have the good fortune of having the support of able advisors and also the financial backing to sort out a few financial matters. Try to keep a low profile and avoid any kind of new commitments. If single you may find yourself getting drawn to person who is a part of your social or study group.
Tarot for Love
Select Sun sign:
Aries (Mar 21 - Apr 20)
Aries (Mar 21 - Apr 20)What the cards say: Be generous and give Path: Don’t expect returns. Don’t be rash and reckless Ally: Virgo will cool you down. Avoid Cancer and self centered approach Card for the week: Tarot key no. III The Empress. Abundance is coming your way. Giving and enjoy giving is the way to richness.
- Advertising -
Have you ever decided to start working out in ear
We may tell you this every year, but there’s a re
We have all mercilessly popped chewing gum in all
Read More