File Photo: Finance Minister Arun Jaitley
Finance Minister Arun Jaitley offered some tax concessions to foreign investors on the contentious minimum alternative tax (MAT) but stood firm on not allowing them a retrospective exemption from the levy.
Here is a 10-Point Cheat-Sheet
1) The capital gains of foreign investors from the sale of securities, interest income, royalty and fees for technical services will be exempted from MAT of about 20 per cent, according to amendments to the Finance Bill moved by finance minister Arun Jaitley. The Finance Bill was passed by the Lok Sabha on Thursday.
2) Mr Jaitley has now expanded the ambit of MAT relief for foreign investors. In the Budget speech he had just mentioned that sale of shares will not be subjected to the levy from April 1.
3) The clarification in the Finance Bill is a welcome move for debt funds, private equity and venture capital funds and other foreign companies with that type of income, said Suresh Swamy, partner at PwC India.
4) Tax experts have said that the move will give some relief to foreign investors but were disappointed that the Finance Minister did not offer retrospective relief. "This will bring relief to debt funds... but unfortunately the finance minister has not provided any relief for the past period," said Rajesh H Gandhi, partner, Deloitte Haskins & Sells LLP.
5) In India, foreign investors have so far paid 15 per cent on short-term listed equity gains, 5 per cent on gains from bonds, and no tax on long-term gains, but from late last year many firms received tax notices requiring them to pay MAT.
6) A group of foreign portfolio investors (FPIs) from the US and the UK had recently moved the Bombay High Court challenging the tax department's demand for MAT. Their petition is expected to be heard by the Mumbai High Court on May 6. Mr Jaitley said investors would have to wait for a court decision on the tax notices.
7) Earlier, tax officials had clarified that those investors from countries such as Mauritius and Singapore which have Double Taxation Avoidance Agreements (DTAA) with India would be not liable to pay MAT on the capital gains
8) So far, the tax department has sent demand notices to 68 non-DTAA (Double Taxation Avoidance Agreements) foreign portfolio investors seeking altogether Rs 602.83 crore.
9) The controversial MAT has been a significant factor behind the recent plunge in Sensex, which has fallen 10 per cent since hitting all-time high in March this year.
10) In an attempt to spur the construction sector, the Finance Minister has also eased MAT rules for real estate investment trusts (REITs). (With Agency Inputs)
Here is a 10-Point Cheat-Sheet
1) The capital gains of foreign investors from the sale of securities, interest income, royalty and fees for technical services will be exempted from MAT of about 20 per cent, according to amendments to the Finance Bill moved by finance minister Arun Jaitley. The Finance Bill was passed by the Lok Sabha on Thursday.
2) Mr Jaitley has now expanded the ambit of MAT relief for foreign investors. In the Budget speech he had just mentioned that sale of shares will not be subjected to the levy from April 1.
3) The clarification in the Finance Bill is a welcome move for debt funds, private equity and venture capital funds and other foreign companies with that type of income, said Suresh Swamy, partner at PwC India.
4) Tax experts have said that the move will give some relief to foreign investors but were disappointed that the Finance Minister did not offer retrospective relief. "This will bring relief to debt funds... but unfortunately the finance minister has not provided any relief for the past period," said Rajesh H Gandhi, partner, Deloitte Haskins & Sells LLP.
5) In India, foreign investors have so far paid 15 per cent on short-term listed equity gains, 5 per cent on gains from bonds, and no tax on long-term gains, but from late last year many firms received tax notices requiring them to pay MAT.
6) A group of foreign portfolio investors (FPIs) from the US and the UK had recently moved the Bombay High Court challenging the tax department's demand for MAT. Their petition is expected to be heard by the Mumbai High Court on May 6. Mr Jaitley said investors would have to wait for a court decision on the tax notices.
7) Earlier, tax officials had clarified that those investors from countries such as Mauritius and Singapore which have Double Taxation Avoidance Agreements (DTAA) with India would be not liable to pay MAT on the capital gains
8) So far, the tax department has sent demand notices to 68 non-DTAA (Double Taxation Avoidance Agreements) foreign portfolio investors seeking altogether Rs 602.83 crore.
9) The controversial MAT has been a significant factor behind the recent plunge in Sensex, which has fallen 10 per cent since hitting all-time high in March this year.
10) In an attempt to spur the construction sector, the Finance Minister has also eased MAT rules for real estate investment trusts (REITs). (With Agency Inputs)
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