Mat

Earlier, certain companies, though earning profits are not used to pay tax due to various exemptions, weighted deductions and tax planning structure. To make such companies to pay income-tax, the concept of Minimum Alternate Tax was introduced. As per MAT provisions, a  COMPANY  has to calculate book-profits after making adjustments prescribed in Sec 115JB. The tax rate to be applied at present is 18.5% of book-profit (surcharge and Education cess additional). This tax has to be compared with the tax calculated as per normal provisions of IT act and whichever amount is higher has to be paid for that Assessment Year. The excess of MAT paid over normal tax will be allowed to be carried forward and set-off against normal tax in future assessment years.