Minimum Alternate Tax (MAT)
With a view to bring zero taxpaying companies having book profits, under the tax net, the domestic tax law requires companies to pay MAT in lieu of the regular corporate tax, in a case where the regular corporate tax is lower than the MAT.
However, MAT is not applicable in respect of:
- Income exempt from tax (excluding exempt long-term capital gains from tax-year ending 31 March 2007)
- Income of certain sick industrial companies
The effective MAT rate as proposed by Finance Bill, 2011 is as follows:
