Minimum Alternate Tax( MAT) Section 115JB Income

Tax Act,1961

According to Income Tax Act, 1961 Income Tax is liable on income earned during the relevant previous. But some companies was showing huge profit  according companies Act book of account while computation income according to Income Tax Act ,1961 show’s  Nil profit. So that these type of companies escape from income tax due to difference in depreciation rate and condition of allowance or disallowance in both Act. While notice that many companies follow this trend. Central Government bring Section 115JB as minimum alternate tax.The concept of MAT is govern by the provisions contains in section 115JB of Income Tax Act, 1961.

Scope of Minimum Alternate Tax

MAT is applicable to all companies including foreign companies.

MAT Tax Rate

According to section 115JB every  taxpayer  being a companies is liable @15% of book profit

Plus surchage ( as applicable)

Plus Education cess

Note: 

MAT rate will be 9% of Book profit if company is

A unity of  an International Financial Service Centre and bring convertal foreign exchange.