minimum alternate tax

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Lokesh

Lokesh (Querist)
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16 July 2009 What is MAT in terms of Tax?

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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16 July 2009 The Indian Income Tax Act contains large number of exemptions from total income. Besides exemptions, there are several deductions permitted from gross total income. Further, depreciation allowable under the Income Tax Act is not the same as required under the Companies Act. The result of such exemptions, deductions, and other incentives under the Income tax Act in the form of liberal rates of depreciation is the emergence of Zero tax companies which inspite of having high book profit are able to reduce their taxable income to nil.

The system of minimum alternate tax has accordingly been introduced under which a company is required to pay a minimum tax of 15 % of the book profit(budget 2009) in case the tax on the total income computed under the normal provisions of law works out to less than this amount [Sec 115JB].

Lokesh

Lokesh (Querist)
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17 July 2009 Thanks for the answer sir.

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