MAT Rate & its Applicablity

What to Do If MAT applicable rate is 9%?

MAT stands for Minimum Alternate Tax and AMT stands for Alternate Minimum Tax. Initially the concept of MAT was introduced for companies and progressively it has been made applicable to all other taxpayers in the form of AMT.

The objective of introduction of MAT was to bring into the tax net "zero tax companies" which in spite of having earned substantial book profits and having paid dividends, do not pay any tax due to tax concessions and incentives provided under the Income-tax Law.

What are applicable rates of MAT?

MAT is computed @ 15% (plus surcharge and cess as applicable) on book profit.

MAT is levied at the rate of 9% (plus surcharge and cess as applicable) in case of a company, being a unit of an International Financial Services Centre and deriving its income solely in convertible foreign exchange.

Process In Software.

Sometimes user may notice that the applicable rate in MAT report in coming as 9% instead of 15% or vice versa. So for that, user is suggested to check the IFSC unit option as below:

Transactions>>Filing Information>>Other Information and choose IFSC unit as YES or NO from the drop down.

Hope this clarifies.

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