Govt exempts foreign companies without permanent establishment from MAT payment

Government has already clarified the inapplicability of MAT provisions to FIIs/FPIs

Government has decided to amend Income-Tax Act 1961 so that with effect from 01 April 2001, the provisions of Section 115JB shall not be applicable to a foreign company if the foreign company is a resident of a country having DTAA with India and such foreign company does not have a permanent establishment within the Definition of the term in the Relevant DTAA.

Earlier, the issues relating to taxation of foreign companies, having no permanent establishment in India, have been under consideration of the Government. In this regard, the Government has already clarified the inapplicability of MAT provisions to FIIs/FPIs.

The Government has now considered the issue of applicability of MAT under Section 115JB of the Income-tax Act to foreign companies having no place of business/permanent establishment in India.

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