MAT Rates & Its Applicablity

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.

    • Related Articles

    • ZenIT || Calculation of Minimum Alternative Tax (MAT)

      What is MAT: As companies avoided taxes using all possible rebates, the MAT was introduced. MAT is a provision in the IT Act to limit the exemptions and rebates availed by companies. With MAT, companies have to necessarily pay a minimum amount of tax ...
    • MAT Credit Setoff

      MAT Credit Setoff  In the assessment year when regular tax becomes payable, the difference between the regular tax and the tax computed under MAT for that year will be set off against the MAT credit available. We understand this from the example ...
    • Income Tax || IFSC Code not found

      Note: Before proceeding with the above instructions, it is strongly recommended to take a backup of the software. Follow the detailed steps below: Backup Procedure: a. Navigate to the C Drive. b. Copy the "KDK Data" folder and the "Data" folder from ...
    • Excel import - Tax Rate should be numeric

      Excel import  - Tax Rate should be numeric Solution  This error comes when TDS details (24q,26q,27q,27eq) are imported from Excel Template and the tax rate is not entered in the numeric format Open excel template > "deductee detail" sheet Select a ...
    • Income Tax || Slab for FY 2020-2021 (AY 2021-2022) in India

      Income Tax Slab for Resident Individuals aged less than 60 Years(Both Male & Female) Budget 2020 has given the individuals options to choose from FY 2020-21 onwards. Either to opt for the same tax rates which were applicable in last year or the new ...