Quick Summary
The Government has proposed a comprehensive rationalisation of the Minimum Alternate Tax (MAT) framework to simplify corporate taxation and facilitate a smoother transition from the old tax regime to the new tax regime. The proposed changes, introduced through Clause 50, will take effect from 1 April 2026 and apply from tax year 2026-27 onwards. Existing MAT Framework Under the Income-tax Act, 2025 Under the current provisions of Section 206 of the Income-tax Act, 2025, MAT is applicable to co
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FAQ :
The government is proposing to make MAT a final tax in the old regime, meaning no new MAT credit will be allowed. The MAT rate will also be reduced from 15% to 14%.
The revised MAT provisions will come into force from 1 April 2026 and will apply to the tax year 2026-27 and subsequent years.
No new MAT credit will be allowed for tax paid under MAT provisions in the old regime. Existing MAT credit can be offset in the new regime, but with restrictions: up to 25% of tax liability for domestic companies and to the extent of the difference between normal tax and MAT for foreign companies.
The changes are intended to simplify corporate taxation, facilitate a smoother transition between tax regimes, reduce long-term complexity, and minimise litigation.
The MAT rate has been reduced from 15% to 14% of book profit.
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