New Delhi, Sept 2 (KNN) The Government has accepted the recommendation by Committee on Direct Tax matters chaired by Justice A P Shah that the Foreign institutional investors (FIIs) will not face minimum alternate tax, or MAT, in India. 

The Committee was constituted with the initial mandate to examine the matter relating to levy of MAT on FIIs/FPIs (Foreign Institutional Investors/ Foreign Portfolio Investments) for the period prior to April 1, 2015.
 
The Committee has recommended that section 115JB of the Income-tax Act may be amended to clarify the inapplicability of MAT provisions to FIIs/FPIs. Alternatively, the Committee has suggested that a Circular may be issued clarifying the inapplicability of MAT provisions to FIIs/FPIs.
 
The Government has accepted the recommendation of the Committee to clarify the inapplicability of MAT to FIIs/FPIs and has decided that an appropriate amendment to the Income-tax Act will be carried out, Finance Ministry has said in a release. 
 
Through the amendment the Government proposes to clarify that MAT provisions will not be applicable to FIIs/FPIs not having a place of business/ permanent establishment in India, for the period prior to 01.04.2015, the release added.
 
Pending such amendment, CBDT will convey to the field formations the decision of the Government to accept the recommendation.

Minimum Alternate Tax (MAT) is a tax levied on short- and long-term capital gains and interest income.  (KNN Bureau)