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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 alternatively to normal tax. Rate of AMT is 18.5% of adjusted total income (plus applicable surcharge and cess). AMT is a tax levied on ‘adjusted total income’ in an FY wherein tax on normal income is lower than AMT on Adjusted total ...
Jun 26, 2024 · MAT is a minimum tax imposed by the government to ensure some level of tax collection, even if deductions and exemptions significantly reduce the regular tax amount. Carry Forward Period: Currently, MAT credit can be carried forward for a period of 15 assessment years from the year it's generated.
Jan 19, 2024 · Minimum Alternate Tax calculation example: The taxable income of ABC Company, not availing any tax exemptions/incentives, as per the provisions of the Income Tax Act, 1961 is Rs. 10 lakh. Thus, the normal tax liability of this company at the rate of 22% corporate tax will be Rs. 2.2 lakh plus cess and surcharge.
May 23, 2024 · And if their tax liability turns out to be less than 18.5%, they have to pay the Minimum Alternative Tax at 18.5%. In simple words, the individuals and non corporates are required to pay higher of the following - Tax liability as per the normal taxation system under the Income Tax Act, 1961; AMT or Alternative Minimum Tax at the rate of 18.5%.
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What is minimum alternative tax?
What is minimum alternative tax (mat)?
When was minimum alternative tax introduced?
What is Alternative Minimum Tax (AMT) credit?
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].
