New Delhi: In effort to calm the nerves of the Foreign Institutional Investors (FIIs) later on Tuesday evening, Union Finance Minister Arun Jaitley announced that these would be exempt from the MAT (minimum alternate tax) and it would not be imposed on overseas portfolio investors retrospectively. A committee under Justice A P Shah had been set up to look into this issue and it had submitted its report last week. Making an announcement, Jaitley said:” “I have accepted the recommendations of the Justice AP Shah panel. The committee was of the view that it was not the intention of the MAT law for it to be levied upon FIIs.”
He informed that an amendment to the Income Tax Act to reflect the same will be made possibly in the winter session of Parliament in November/December. “What applies post April 2015, that is no MAT on capital gain on FIIs, will also apply on pre-April 2015,” said the finance minister who had exempted the FIIs from this levy from 1st April in his budget. The issue was a major cause for concern for the FIIs that have invested about $20 billion in Indian stocks in the past year and $28 billion in bonds. In the month of August alone, the foreign investors had sold a record shares worth Rs 16,877 crore.
