'Deficient returns by Sebi-registered FIIs not defective'

Providing relief to FIIs, the Income Tax department on Thursday said deficient returns filed by Sebi-registered foreign portfolio investors who do not have a permanent establishment in India will not be treated as 'defective'.It had earlier issued notices on defective returns to Foreign Institutional Investors/Foreign Portfolio Investors (FIIs/FPIs) in cases where Balance Sheets and Profit & Loss accounts were not filled."In order to overcome this difficulty, it is clarified that such returns will not be treated as defective in cases where the FIIs/FPIs are registered with SEBI, have no Permanent Establishment/Place of Business in India and have provided basic information...if there is business income," the department said in a statement.The returns for Assessment Year 2015-16 where the Sebi registration number has been provided by the FIIs/FPIs are being taken up for processing at CPC Bengaluru, it added.For previous assessment years where the above information is not available in the I-T Return, FII/FPI may provide such details in their online response on the e-filing portal of the www.incometaxindiaefiling.gov.in to the previously issuednotice.Finance Minister Arun Jaitley had in 2015-16 budget exempted FIIs from payment of Minimum Alternate Tax with effect from April 1, 2015. Further, an amendment will also be carried out in the Income Tax Act to exempt FIIs from payment of MAT on capital gains retrospectively.So far this year overseas investors have made a net investment of Rs 18,260 crore in equities and Rs 51,347 crore in debt markets.