What Is Mat Tax

Normal tax rate applicable to an indian company is 30 plus cess and surcharge as applicable.

What is mat tax.

It was first introduced by the finance act 1987 and made effective from ay 1988 89. My alabama taxes mat is the state s electronic filing and remittance system used today for the filing of state city and county sales use rental and lodgings taxes. As per the concept of mat the tax liability of a company will be higher of the following two. As per section 115jb all companies are required to pay corporate tax at least equal to the higher of the following.

Minimum alternate tax mat is a tax effectively introduced in india by the finance act of 1987 vide section 115j of the income tax act 1961 it act to facilitate the taxation of zero tax companies i e those companies which show zero or negligible income to avoid tax under mat such companies are made liable to pay to the government by deeming a certain percentage of their book. Companies find various loop holes to avoid paying income tax by using several exemptions. Tax 30 on rs. Book profit of the company is rs.

So the government imposes a minimum alternate tax or mat as an advance. Minimum alternative tax is payable under the income tax act. Mat a brief introduction. Mat or minimum alternate tax is a provision in direct tax laws to limit tax exemptions availed by companies so that they mandatorily pay a minimum amount of tax to the government.

Please try again later. Mat is a way of making companies pay a minimum amount of tax. The concept of mat was introduced to target those companies that make huge profits and pay the dividend to their shareholders but pay no minimal tax under the normal provisions of the income tax act by taking advantage of the various deductions and exemptions allowed under the act. The tax liability of a company will be higher of.

We apologize for the inconvenience. If you continue to receive this message please contact mat support. 8 40 000 will amount to rs. Since october 1 2013 alabama retailers have been able to file and pay all city county sales use and rental taxes in mat the one spot to file.

Companies try to minimise giving taxes by taking advantage of depreciation deductions exemptions etc from the government. Mat is a tax levied under section 115jb of the income tax act 1961. What is minimum alternative tax. Later it was withdrawn by the finance act 1990 but reintroduced again from 1 april 1997.