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Foreign investors receive tax relief from MAT


Foreign investors receive tax relief from MAT

In order to calm investors and deliver some relief, the Indian Government has clarified that Minimum Alternate Tax (MAT) would not be applicable on foreign investors’ earnings from capital gains on interest, royalties, sales of securities and fees on technical services.  This was part of amendments made to the Finance Bill by finance minister Arun Jaitley.

This exemption will apply to all these aforementioned kinds of investments if the normal tax rate on the incomes is lower than 18.5 per cent.  Since interest income will be exempt from MAT from April this year, this amendment will also bring much relief to debt funds.

The finance minister also eased MAT rules for Infrastructure Investments Trusts (InvITs) and real estate investment trusts (REITs).

These changes do not apply retrospectively and will also not apply to any income earned by foreign investors in government and other fixed income securities.

The Indian government is making every effort to ease doing business in the country and we are always available to assist you in making investments in India.  Please feel free to contact Ravi Kurani on +44 845 838 2672 or email on for any assistance.

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