MAT

Minimum Alternate tax (called “MAT”) was imposed on companies due to the increase in the number of zero-taxpaying companies.
Companies pays no or less tax, in spite of earning good book profits

Companies claims that their tax profit (as per provision of income tax Act) is nil or less so they (company) need not have to pay tax.
so to control the tax escaping companies & reduce evasion MAT was introduced.

Under MAT system a company has to pay
(1) income tax on profit computed as per income tax act,1961
OR
(2) @ 15% of book profit (as per accounts) after some simple adjustments mentioned u/s 115JB of the income tax act,1961.
Which ever is HIGHER

Source : caclubindia......