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What is minimum alternative tax?
What is minimum alternative tax (mat)?
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What is Alternative Minimum Tax (AMT) credit?
Jun 3, 2022 · Normal tax rate applicable to an Indian company is 30%* (plus cess and surcharge as applicable). Tax @ 30% on Rs. 8,40,000 will amount to Rs. 2,52,000 (plus cess). Book profit of the company is Rs. 18,40,000. MAT liability (excluding cess and surcharge) @ 15% on Rs.18,40,000 will come to Rs. 2,76,000.
- Mat – A Brief Introduction
- How to Calculate Mat?
- What Is Mat Credit?
- Frequently Asked Questions
Minimum Alternative Tax is payable under the Income Tax Act. The concept of MAT was introduced to target those companies that make huge profits and pay the dividend to their shareholders but pay no/minimal tax under the normal provisions of the Income Tax Act, by taking advantage of the various deductions, and exemptions allowed under the Act. But ...
MAT is equal to 15% with effect from AY 2020-21 (MAT was 18.5% prior to AY 2020-21) of Book profits (Plus surcharge and cess, as applicable). Book profit means the net profit as shown in the profit & loss account for the year as increased and decreased by the following items:
When any amount of tax is paid as MAT by the company, then it can claim the credit of such tax paid in accordance with the provision of section 115JAA. Allowable Tax Credit: Tax paid as per MAT calculation — Income tax payable under normal provision of Income-tax Act, 1961. Note:No interest shall be paid on this Tax credit by the Department. For Ex...
MAT is applicable to all companies including foreign companies. The tax rate is 15% from FY 2019-20 i.e. AY 2020-21. Such tax credit shall be carried forward for 15 Assessment Years immediately succeeding the assessment year in which such credit has become allowable. Are MAT and AMT the same? The primary difference between MAT and AMT is that MAT i...
Alternative Minimum Tax – Basics. As it is evident from the name, AMT is a minimum tax that is leviable alternative to normal tax. Rate of AMT is 18.5% of adjusted total income (plus applicable surcharge and cess).
Jun 26, 2024 · Minimum Alternate Tax (MAT) is applicable to Companies in India. MAT was introduced to address the situation where companies reported book profits in their financial statements but ended up paying little or no income tax due to various exemptions, deductions, and allowances available to them under the Income Tax Act.
Jan 19, 2024 · Minimum Alternate Tax (MAT): For FY 2019-20, tax payable is computed at 15% (previously 18.5%) on book profit plus applicable cess and surcharge.
May 23, 2024 · AMT or Alternative Minimum Tax at the rate of 18.5%. When is Alternative Minimum Tax Applicable? In the beginning, the concept of Alternative Minimum Tax was introduced for companies. However, the Finance Act 2011 and 2012 amendments extended the scope of AMT to LLPs, non-corporate taxpayers, and Individuals. AMT is applicable to the following -
The Minimum Alternate Tax is a measure to include all companies in the income tax loop. The MAT ensures that no company with healthy finances and substantial income can avoid paying income tax, even after claiming exemptions. This is an important topic for the UPSC syllabus of the Indian Economy subject [GS-III].
