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Commentary

Jaitley Says Minimum Alternate Tax on FIIs Won’t Apply Even In The Past

There will be no MAT on FIIs even before April 1, 2015. The history is…well, read this post.

From ET:

“We are of the considered opinion that the alternative course suggested by the Justice Shah panel, that a necessary amendment in the Income Tax Act would be required…(would be pursued). And we would be bringing out that amendment in the statute.

“Meanwhile, pending such amendment, all the field formations will be conveyed by way of circular that this is the decision of the government so they will have to hold their hands and not make or pass any orders in these matters till such time. Hopefully in the winter session of Parliament or whenever there is next session of Parliament, we will be able to bring out such an amendment expeditiously”, he said.

Wait one second.

This is going to have to depend on Parliament? Good luck with that. We have had about three years of parliamentary nothingness now.

But still, this is a positive. Too little, too late though. They had to wait for a committee to suggest that they should do the right thing, when the right thing was effing obvious. Well, at least it wasn’t as dumbheaded as just leaving it in limbo and having tax officers continue to hound FIIs.

I would say it’s positive for Indian markets, but with markets this volatile, you never know what the next day will bring. For now, the only think you can count on is that the FIIs that got MAT Tax notices can safely ignore them.