Over the past few months, several foreign portfolio investors registered in India have received notices from the Indian tax authorities demanding payment of Minimum Alternate Tax in respect of transactions which took place over the course of prior assessment years. The Indian Government has indicated that it could raise several billions of dollars from pursuing foreign investors for this tax, suggesting that more demands are likely to be issued.

We discuss below the background and implications of the Minimum Alternate Tax and outline a number of aspects of this tax which create uncertainty as to the tax liabilities of foreign funds having invested in India prior to April 1, 2015.

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