Minimum alternate tax?

normally, comapny liable pay tax on income computed in accordance provisions of income tax act, profit , loss account of company prepared per provisions of companies act. there large number of companies had book profits per profit , loss account not paying tax because income computed per provisions of income tax act either nil or negative or insignificant. in such case, although companies showing book profits , declaring dividends shareholders, not paying income tax. these companies popularly known 0 tax companies. inorder bring such companies under income tax act net, section 115ja introduced w.e.f assessment year 1997-98.

under existing provisions of section 115jb of income tax act, company required pay minimum alternate tax (mat) on book profit, if income-tax payable on total income, computed under act in respect of previous year relevant assessment year commencing on or after 1st day of april, 2010, less such minimum. amount of tax paid under section 115jb allowed carried forward , set off against tax payable upto tenth assessment year succeeding assessment year in tax credit becomes allowable under provisions of section 115jaa.

proposed amend sub-section (1) of section 115jb increase mat rate eighteen per cent existing fifteen per cent.

amendment proposed take effect 1st april, 2011 , will, accordingly, apply in relation assessment year 2011-12 , subsequent years.

define minimum alternate tax in india how computed? , elgibility

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