Zee Media Bureau
New Delhi: Seeking to contain the adverse fall out of minimum alternate tax (MAT) levy on foreign investors, Finance Minister Arun Jaitley on Thursday said that foreign institutional investors (FIIs) will be exempt from it however there will be no retrospective relief.
Responding to the Finance Bill debate in Parliament, Jaitley, said the exemption would apply only in those cases where the normal tax rate is below 18.5 percent.
"All capital gains from sale of securities as well as royalties, interest, technical services fee earned by foreign companies will be exempt from MAT, if the normal tax rate on such income is lower than 18.5 percent," Jaitley said.
Earlier this week Jaitley had said that the government will set up a high-level committee to sort out the taxation issues of the past and make the system predictable.
He had said that the disputes now attracting attention are legacy cases, which are tax demands arising from actions that the tax authorities and the judiciary took before NDA government came to power.
Jaitley also told Parliament that the government will come out with a simplified Income Tax Return (ITR) form soon.
The new format of ITR forms that was recently withdrawn by the government in the wake of complaints over providing details of foreign trips and domestic bank accounts is being revised to make it simpler.
The issue between foreign investors and the government cropped up last year when the tax department started sending notices to FIIs to cough up MAT.
