In a big relief to foreign firms, government today exempted them from paying Minimum Alternate Tax (MAT) retrospectively from April 2001, provided they did not have a permanent establishment in India.
In case the companies belong to countries with which India does not have a DTAA, the MAT exemption will apply if they are exempted from registration under Section 592 of the Companies Act 1956, or Section 380 of the Companies Act 2013. "An appropriate amendment to the Income-tax Act in this regard will be carried out," said the Finance Ministry statement.
Earlier this month, the government had exempted foreign institutional and portfolio investors from payment of MAT on the capital gains made by them before April 1, 2015. The Budget 2015-16 had already exempted FIIs/FPIs from paying the levy on gains made after April 1.