Skip to main content

Govt sides with Shah panel MAT on FIIs history

By
The finance ministry on Tuesday formally accepted the recommendations of a committee on retrospective cases of Minimum Alternate Tax (MAT), headed by Law Commission chairman A P Shah. With this, the government will withdraw all past cases of MAT on foreign institutional investors ( FIIs).
The move came on a day when jittery investors offloaded shares, leading to a fall of about two per cent in the BSE Sensex.
The government would modify a contentious provision of the Income Tax Act to make it more transparent and move amendments in this regard in the winter session of Parliament, Finance Minister Arun Jaitley said. “ I have accepted the A P Shah panel report submitted on Aug 25, 2015 … It said MAT would not be leviable on FIIs … a necessary amendment in provisions in section 115 JB of the I- T Act would be required and hopefully, we will bring that out in the winter session, or whenever the next Parliament session is held,” he said.
“We will issue instructions to field formations till the I- T Act is amended.The amended I- T Act will be more transparent,” Jaitley added.
A report by the Shah panel had suggested the government move towards certainty and predictability in the tax regime.
“FIIs are mostly open- ended investment funds, which permit their investors to enter and exit daily, based on the NAV ( net asset value) of the fund, unanticipated tax liability (or the fear thereof) relating to previous years, which would have to be borne by the current investors, maybe a sufficient trigger for the investors to exit,” it said.
In the 19 years since MAT was introduced (1996), it had never been levied on FIIs and foreign portfolio investors (FPIs). Instead, these entities were governed by the beneficial tax scheme under section 115AD.
Business Standard, New Delhi, 2nd Sept. 2015

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Healthy balance sheets augur well for economy: RBI Governor Sanjay Malhotra

By
  Large tariffs by the United States administration and elevated geopolitical risk have increased near-term global financial stability risks, and along with weather events pose downside risks to domestic growth, Reserve Bank of India(RBI) Governor Sanjay Malhotra said in the foreword to the Financial Stability Report released today.Noting that domestic growth momentum is buoyed by strong domestic drivers, sound macroeconomic fundamentals and prudent policies, Malhotra said: “External spillovers and weather-related events could pose downside risks to growth.”On the other hand, he said the outlook for inflation is benign, and there is greater confidence in the durable alignment of inflation with the Reserve Bank’s target.Commenting that the structural shifts reshaping the global economy are making policy intervention challenging, the Governor emphasised the need for central banks and financial sector regulators to remain vigilant, prudent and agile in safeguarding their economies and...
Post a Comment
Read more