MAT hike in new code could hurt IT, pharma companies
Pharma and software companies, which pay MAT, could witness some selling pressure whereas the broader market is unlikely to react in any major way.
By TNN |
MUMBAI: Pharma and software companies, which pay Minimum Alternate Tax (MAT), could witness some selling pressure whereas the broader market is unlikely to react in any major way to the cabinet decision to clear the Draft Tax Code (DTC). Pharma and software firms could be impacted as they pay MAT, where the tax rate has been proposed to be hiked from 18% to 20%.
The decision to hike MAT rate to 20% could be slightly negative for most software and pharma companies, since these companies mostly pay MAT, said Nischal Maheshwari , EVP-Research , Edelweiss Securities.
Some others are in the wait-and-watch mode. “Over the next few days people will go through the code. And then it is likely to be placed in the Parliament on Monday for discussion. So I don’t see any major impact of DTC on the market on Friday ,’’ said Arun Kejriwal, director , KRIS, an investment advisory firm.
Brokers and dealers feel that in case the earlier proposal of taxing long term capital gains is diluted and reverted back to the current status of zero tax, it will be positive for all investors.
“FIIs were concerned about tax on long term capital gains,’’ said a top broking house official. It is still not clear if the cabinet has reverted to no tax on long term capital gains.
The decision to hike MAT rate to 20% could be slightly negative for most software and pharma companies, since these companies mostly pay MAT, said Nischal Maheshwari , EVP-Research , Edelweiss Securities.
Some others are in the wait-and-watch mode. “Over the next few days people will go through the code. And then it is likely to be placed in the Parliament on Monday for discussion. So I don’t see any major impact of DTC on the market on Friday ,’’ said Arun Kejriwal, director , KRIS, an investment advisory firm.
Brokers and dealers feel that in case the earlier proposal of taxing long term capital gains is diluted and reverted back to the current status of zero tax, it will be positive for all investors.
“FIIs were concerned about tax on long term capital gains,’’ said a top broking house official. It is still not clear if the cabinet has reverted to no tax on long term capital gains.
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