I-T dept to rule on MAT claims for tax treaty investors within a month

The tax department will rule within a month on whether to uphold outstanding claims for Minimum Alternative Tax (MAT) made against foreign investors who qualify for tax treaty benefits, the finance ministry said in a circular on Tuesday.

Foreign investors in India have previously paid 15 per cent on short-term listed equity gains, 5 per cent on gains from bonds, and nothing on long-term gains. However, from late last year many firms received notices demanding payment of the so-called MAT on past income.

Earlier this week, senior finance ministry officials sought to ease investor worries over MAT tax uncertainties, reassuring investors that claims against funds based in jurisdictions that have tax treaties with India will not be subject to MAT taxes.

(Reuters)