Chapter XII-BA contains the special provisions for levy of alternate minimum tax in case of persons other than a company. Any person other than a company, who has claimed a deduction
- under any section (other than section 80P) included in Chapter VI-A under the heading "C - Deductions in respect of certain incomes" or
- under section 10AA or
- investment-linked deduction under section 35AD
- would be subject to AMT [Section 115JEE(1)].
The provisions of AMT would, however, not be applicable to an individual, HUF, AOPs, BOls, whether incorporated or not, or artificial juridical person, if the adjusted total income of such person does not exceed Rs. 20 lakh.
"Adjusted total income" would mean the total income before giving effect to Chapter XII-BA as increased by
- the deductions claimed, if any, under section 10AA;
- the deduction claimed under section 35AD, as reduced by the depreciation allowable under section 32, as if no deduction under section 35AD was allowed in respect of the asset for which such deduction is claimed; and
- deduction under any section included in Chapter VI-A under the heading C-Deductions in respect of certain incomes [For Intermediate level, the relevant sections are 80JJAA, 80QQB & 8ORRB].
Accordingly, where the regular income-tax payable by an individual for a previous year computed as per the provisions of the Income-tax Act, 1961 is less than the AMT payable for such previous year, the adjusted total income shall be deemed to be the total income of the person.
Such person shall be liable to pay income-tax on the adjusted total income @ 18.5%
Tax credit for AMT
Tax credit is the excess of AMT paid over the regular income-tax payable under the provisions of the Income-tax Act, 1961 for the year.
Tax Credit for AMT = AMT Paid (-) Regular income-tax payable under the provisions of the Income-tax Act, 1961.
Such tax credit shall be carried forward and set-off against income-tax payable in the later year to the extent of excess of regular income-tax payable under the provisions of the Act over the AMT payable in that year.
Amount of Set Off = Regular income-tax payable under the provisions of the Income-tax Act, 1961 (-) AMT Payable for that year.
The balance tax credit, if any, shall be carried forward to the next year for set-off in that year in a similar manner. AMT credit can be carried forward for set-off upto a maximum period of 15 assessment years succeeding the assessment year in which the credit becomes allowable.
Tax Credit allowable even if Adjusted Total Income does not exceed Rs 20 lakh in the year of set-off
In case where the assessee has not claimed any deduction under section 10AA or section 35AD or deduction under section 80JJAA, 80QQB & 8ORRB in any previous year and the adjusted total income of that year does not exceed Rs. 20 lakh, it would still be entitled to set-off his brought forward AMT credit in that year.