In caseof taxation of LLP according to income tax act 1961
MAT(minimum alternate tax) is not applicable
BUT
AMT(alternate minimum tax )is applicable
so what is the difference betwwn MAT & AMT
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Taxation of llp
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What Is MAT (Minimum Alternate Tax)?
As per tax law, company pays tax on the income computed according to the provisions of the income tax act whereas the profit and loss account of the company is prepared as per provision of companies act. Due to this large number of companies who were incurring good amount of profit (as per profit & loss account) and declaring dividends to their shareholders were not liable to pay any income tax as their tax payable as per income tax act was either zero or very less. These companies comes into a category of zero tax companies.
What Is AMT (Alternate Minimum Tax)?
AMT is similar to MAT, any entity or individual whose adjusted total income exceeds Rs 20 lakhs is liable to pay Alternate Minimum tax @ 18.5%.
Although MAT and AMT are similar but there are few difference which apart both from each other. lets have a look of the difference between MAT vs. AMT.
Minimum Alternate Tax (MAT) |
Alternate Minimum Tax (AMT) |
| MAT is applicable on companies | AMT is applicable on all the entities other than companies (even individuals) who claim profit linked deductions. |
| MAT is payable on book profit if the tax payable is less than MAT | AMT is payable on adjusted total income of 20 lakhs or more, if tax payable is less than AMT. |
| Rate Of MAT : 18.5% + Surcharge (5%) + Education Cess (3%) = 20% | Rate Of AMT : 18.5% + Education Cess (3%) =19.05% |
Regards,
RAJESH CHOUDHARY
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