(Indian Express) Minimum Alternate Tax
27th April 2015
Minimum Alternate Tax
- PM Rajiv Gandhi, introduced min. Corporate Tax, in 1987 to target corporates.
- The law then allowed several deductions & exemptions which would be utilized to significantly lower or escape tax liability.
- A local , widely held company had to pay a tax of atleast 15% of book profit.
- In 1996, Minimum Alternate tax – P. Chidambaram
~ kept out – power & infrastructure
~ extended to – export profits
~ extended again to – developer & units in SEZs.
~ From April 1 2015, Foreign institutional Investors who buy billions worth of stock of Indian companies.
- MAT is charged at 18.5% + surcharges = >20%
- Tax treaties signed by India with some countries notably Mauritius & Singapore – provide for an exemption from tax on gains from Investing in stocks.
Art. Ref. : Meaning MAT: What is Minimum Alternate Tax, the MASSIVE demand that the I-T department has slapped on FIIs and FPIs? – http://indianexpress.com/article/explained/meaning-mat/
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