Many thanks to Setbharatbiz. We had an excellent experience working with its expert. They have a strong sense of professionalism when dealing with clients.
Mudassir CEO, Twinfinty DigiTech SolutionsWe would recommend Setbharatbiz incorporation services to any founder without a second doubt. The process was beyond efficient and shows Setbharatbiz founder's vision
Nagasrinivas Director,Prakash Nagasrinivas & Saradhy AssociatesI was searching for a company for assistance in the incorporation services. Then one of my friend tell me about Setbharatbiz and definitely the Setbharatbiz is the best.
Prakash Kakani Director, PNS EV HubMAT (Minimum Alternate Tax) and AMT (Alternate Minimum Tax) are provisions under the Income Tax Act, 1961, designed to ensure that companies and certain taxpayers with significant income but lower taxable income (due to exemptions or deductions) contribute a minimum amount of tax. While MAT applies to companies, AMT is applicable to non-corporate taxpayers such as LLPs and individuals claiming specified deductions. Compliance with MAT and AMT rules ensures adherence to tax laws, avoids penalties, and demonstrates financial transparency.
1. Fair Taxation : Ensures that entities with high book profits or significant deductions pay a minimum tax.
2. Legal Compliance : Mandates adherence to Sections 115JB (MAT) and 115JC (AMT).
3. Avoidance of Penalties : Prevents penalties and interest for non-compliance with MAT or AMT provisions.
4. Credit for Future Years : Provides MAT/AMT credit, allowing taxpayers to offset taxes in subsequent years.
5. Equity in Taxation : Ensures a balanced contribution to government revenue, even from entities claiming exemptions.
Feature | MAT | AMT |
---|---|---|
Applicability | Companies (domestic and foreign) | Non-corporate taxpayers (LLPs, individuals) |
Tax Rate | 15% of book profits | 18.5% of adjusted total income |
Threshold Limit | No threshold | Adjusted income exceeding ₹20 lakh |
Exemptions | IFSC companies, shipping under tonnage tax | Income below ₹20 lakh |
Carry Forward Credit | 15 years | 15 years |
MAT ensures companies pay a minimum tax of 15% on book profits, even if taxable income is lower due to deductions.
AMT requires non-corporate taxpayers like LLPs and individuals claiming specified deductions to pay 18.5% on adjusted total income.
Yes, MAT/AMT paid in excess of regular tax liability can be carried forward for up to 15 years.
Non-corporate taxpayers with adjusted income below ₹20 lakh are exempt from AMT.
Tax payments must be made as part of advance tax installments, with final reporting during ITR filing.
Yes, foreign companies earning income in India and preparing financials as per the Companies Act, 2013, are subject to MAT.
MAT credit can offset regular tax liability in future years when regular tax exceeds MAT.
MAT is calculated on book profits, while regular tax is computed on taxable income.
Deductions under Sections 80IA, 80H, 10AA, and 35AD are added back to compute adjusted total income.
Interest under Sections 234B and 234C may apply for late payment of advance tax or non-compliance.