In a move to placate foreign investors, Finance Minister Jaitley confirmed he has accepted the report on minimum alternate tax or MAT, of the AP Shah Panel, that suggests that no retrospective tax be levied on foreign investors.
Mr Jaitley said he would make the change permanent through legislation in the next Parliament session. The markets that slumped lately are expected to cheer the move.
Global banks and investors had challenged the legitimacy of MAT, that was intended to ensure companies inside India paid a minimum tax rate to foreign investors’ gains. However in May the government formed a panel headed by Justice AP Shah to suggest ways to resolve MAT.