Notices to 68 FIIs to recover Rs 602 cr tax towards MAT: Sinha
New Delhi: The Income Tax department has sent notices in 68 cases to Foreign Institutional Investors (FIIs) for payment of dues totalling Rs 608.83 crore towards Minimum Alternate Tax (MAT), Parliament was informed today.
“The applicability of MAT provisions is a legal issue and wherever the cases require application of MAT provisions, the same is being done,” Minister of State for Finance Jayant Sinha said in a written reply to Lok Sabha.
When asked if the tax department has slapped notices to 100 overseas funds for evasion of tax to the tune of USD 5-6 billion, Sinha said notices were issued only in 68 cases, envisaging total tax demand of Rs 602.83 crore.
“Tax notices have been issued in 68 cases of overseas funds to bring to tax the book profits as per MAT provisions under section 115JB of the Income Tax Act, 1961. So far, total tax demand of Rs 602.83 crore has been raised,” the Minister said.
Following a court ruling, the Income Tax department had slapped notices on foreign portfolio investors (FPIs), saying they have to pay 20 per cent MAT on untaxed capital gains made by them over the past three years.
As the issue has generated a lot of controversy, Finance Minister Arun Jaitley is expected to come out with some clarification at the time of his reply to the debate on the Finance Bill in the House.
According to experts, foreign investors paying capital gains tax in their home nations will not be subject to the 20 per cent minimum alternate tax (MAT) in India.
Besides, investors coming from nations with which India has a double taxation avoidance agreement (DTAA) such as Mauritius and Singapore may be exempt as there is no tax on capital gains there.