Double Dilemma

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Aket Lohia, MBA 2014-16, Vinod Gupta School of Management, IIT KharagpurKharagpur

In an attempt of US and European investors to settle tax regime for foreigners, an unrest was felt in them when Indian investors stated that money is owned on years of untaxed gains. The report came into light just when foreign investors are ready to invest in Indian business based on promise of prime minister Mr. Narendra Modi to create a more business friendly environment. According to report international funds and banks need to pay $8billion in cash to Indian government in tax.

ASIFMA and foreign investors are not very happy with the report and tax bill and once again they are worried if they should go forward with their investment plans in Indian business. Minimum alternative tax (MAT) is to ensure that tax breaks don’t pull domestic companies’ effective tax rate below a minimum threshold. But foreign companies received notice starting last year by tax inspectors to pay MAT.

Clearly the change is in odds with the PM Narendra’s Modi desire to bring more foreign investors in India.