What Is Mat In India

The common features of mat are as under.

What is mat in india.

The present mat rate as of fy 2019 20 is 15 of book profit previously 18 5 plus applicable cess and surcharge. The key reason for introduction of mat is to ensure minimum levels of taxation for all domestic and foreign companies in india. Presently mat is applicable to companies domestic and foreign but here only mat on company s u s 115jb is discussed. Features of the mat regime.

In india mat is levied under section 115jb of the income tax act 1961. It was introduced in the year 1987 and implement the following year. To improve accountability and to ensure that no company avoided paying taxes the government of india in 1988 came up with the concept of mat which facilitates the taxation of zero tax companies. Introduced by the finance act 1987 mat came into effect from assessment year 1988 89.

The mat is conducted 4 times a year in the months of february may september and december. Under the provisions of section 115jb where the income tax calculated under the income tax act is less than 18 5 of the book profit then such book profit shall be deemed to the total income of the assessee and tax payable. How is mat calculated. Rules pertaining to section 115ja are applicable to foreign companies that generate profits through their operations in india.

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