Before we proceed with Alternate Minimum Tax (AMT), let's understand the difference between MAT and AMT.
Minimum Alternate Tax (MAT) is applicable only for companies as per section 115JB of the Income Tax Act, 1961. And AMT is applicable for certain persons other than a company as per section 115JC.
The key points are,
Regular income-tax payable for a previous year by a person, other than a company, is less than the alternate minimum tax payable for such previous year,
the adjusted total income shall be deemed to be the total income of that person for such previous year, and
he shall be liable to pay income-tax on such total income at the rate of 18.5%.
If the person is a unit located in an International Financial Services Centre and derives its income solely in convertible foreign exchange, then it is liable to pay alternate minimum tax at the rate of 9%.
The provisions of this section shall not apply to a person who has exercised the option referred to in section 115BAC or section 115BAD.
Adjusted total income is the total income before giving effect to this Chapter as increased by
(i) deductions claimed, if any, under any section included in Chapter VI-A under the heading “C.—Deductions in respect of certain incomes”; and
(ii) deduction claimed, if any, under section 10AA; and
(iii) deduction claimed, if any, under section 35AD as reduced by the amount of depreciation allowable in accordance with the provisions of section 32 as if no deduction under section 35AD was allowed in respect of the assets on which the deduction under that section is claimed.
Every person to whom this section applies shall,
Jul 07, 21 10:17 PM
Small Business Tax Tips - Know how by using section 44AD, 44ADA and 44AE you can save tax and avoid tax audit?
Jun 28, 21 08:41 AM
Alternate Minimum Tax a special provisions applicable for certain persons other than a company
Jun 27, 21 08:37 AM
Allowances Exempt for House Rent, Indian citizen employed aboard, Special allowances u/s 10