"The applicability of MAT provisions is a legal issue and wherever the cases require application of MAT provisions, the same is being done," Minister of State for Finance Jayant Sinha said in a written reply to Lok Sabha.
When asked if the tax department has slapped notices to 100 overseas funds for evasion of tax to the tune of USD 5-6 billion, Sinha said notices were issued only in 68 cases, envisaging total tax demand of Rs 602.83 crore.
Following a court ruling, the Income Tax department had slapped notices on foreign portfolio investors (FPIs), saying they have to pay 20 per cent MAT on untaxed capital gains made by them over the past three years.
As the issue has generated a lot of controversy, Finance Minister Arun Jaitley is expected to come out with some clarification at the time of his reply to the debate on the Finance Bill in the House.
Besides, investors coming from nations with which India has a double taxation avoidance agreement (DTAA) such as Mauritius and Singapore may be exempt as there is no tax on capital gains there.