Budget 2010-: Minimum Alternate Tax (MAT) under Section 115JB increased to 18%

Feb 28, 2010

Under the existing provisions of section 115JB of
 the Income Tax Act, a company is required to pay
a Minimum Alternate Tax (MAT) on its book profit,
if the income-tax payable on the total income, as
computed under the Act in respect of any previous
 year relevant to the assessment year commencing
on or after the 1st day of April, 2010, is less
than such minimum. The amount of tax paid under
section 115JB is allowed to be carried forward
 and set off against tax payable upto the tenth
assessment year immediately succeeding the assessment
year in which tax credit becomes allowable under
the provisions of section 115JAA.


It is proposed to amend sub-section (1) of section
115JB to increase the MAT rate to eighteen per cent
from the existing fifteen per cent.


This amendment is proposed to take effect from
1st April, 2011 and will, accordingly, apply in
relation to the assessment year 2011-12 and subsequent years.