Foreign Firms with No Permanent Set Up exempted from paying MAT

In a big relief to foreign firms, which do not have permanent set up in India, the Modi government has exempted them from paying Minimum Alternate Tax (MAT) retrospectively from April 2001. This is considered as a big boost to the economic reforms in India.

“The provisions of Section 115JB of Income Tax will not apply to foreign companies with effect from April 1, 2001, if they are resident of a country with which India has Double Taxation Avoidance Agreement (DTAA) and they do not have a permanent establishment (PE) in India,” said an official statement.