FIIs may not have to pay MAT for capital gains prior to 1 April 2015
21 August 2015
Foreign portfolio investors (FPIs) may not have to pay minimum alternate tax (MAT) on capital gains made by them prior to 1 April 2015 once the government implements the recommendations of the AP Shah Committee.
The government is considering giving relief to FPIs from MAT and, according to finance ministry officials, FPIs may get relief from paying MAT on capital gains prior to 1 April 2015.
The finance ministry is reported to have thoroughly discussed the recommendations of the AP Shah Panel at the highest level as the report is crucial to its policy stance on existing MAT-related cases.
"The AP Shah committee has recommended granting relief to FIIs on MAT levy prior to 1 April 2015. The government is favourably considering the committee's recommendation," Revenue secretary Shaktikanta Das said on Friday.
Das said the government would soon firm up its views on the AP Shah panel report on MAT on foreign institutional investors.
The AP Shah panel was formed following an uproar by global investors when the income tax department sent notices to 68 FIIs demanding Rs602.83 crore to pay MAT on the book profits made by them up to 31 March 2015.
The AP Shah Panel had submitted its 66-page report (on levy of MAT on foreign institutional investors) to the government on 24 July.
Analysis of the findings of the AP Shah panel report is also crucial for the government to firm up its stance on the Castleton case.
The Supreme Court hearing on the Castleton case has been postponed to 29 September in the wake of the government seeking more time from the apex court to firm up its stance after analysing the findings of the AP Shah headed panel report.
Das also said the Central Board of Direct Taxes (CBDT) will by this month-end issue the second set of frequently asked questions (FAQs) on black money law.
The CBDT and the CA Institute propose to hold a workshop in Mumbai on 26 August and the FAQs are expected to be issued few days after the workshop is over, Das said.
Das also made it clear that the black money law was not intended to be a revenue mobilisation measure nor an amnesty scheme.
"It is not a good idea to have any amnesty schemes as they would have negative results," he said.
Das also reiterated that confidentiality would be maintained on the information furnished to the income tax department under the compliance window of the black money law.