Keep in abeyance MAT assessment on FIIs/FPIs: CBDT

CBDT officials have been asked to keep in abeyance the pending minimum alternate tax (MAT) assessment proceedings dating prior to April 1, 2015 relating to foreign institutional investors (FII) and foreign portfolio investors (FPI).

The Central Board of Direct Taxes (CBDT), the apex direct tax body, has also directed its field officers to not proceed with the recovery of outstanding tax demands, if any.

The directions came as the CBDT said on Wednesday that the government had accepted the recommendation of the A.P. Shah Committee that examined the applicability of MAT on FIIs/FPIs for the period prior to April 1, 2015.

It said the Shah Committee had recommended that Section 115JB of the Income Tax Act be amended to clarify the inapplicability of the provisions to FIIs/FPIs having no permanent establishment or place of business in India.

It said the government had decided to carry out appropriate amendments to the tax law.