What Is Mat Tax In Hindi

Minimum alternate tax mat is a tax effectively introduced in india by the finance act of 1987 vide section 115j of the income tax act 1961 it act to facilitate the taxation of zero tax companies i e those companies which show zero or negligible income to avoid tax under mat such companies are made liable to pay to the government by deeming a certain percentage of their book.

What is mat tax in hindi. Normal tax rate applicable to an indian company is 30 plus cess and surcharge as applicable. Mat is charged at 18 5 and after taking into account surcharges works out to a little over 20. Normally a company is liable to pay tax in accordance with the provisions of the. Minimum alternate tax mat meanwhile is like tax paid in advance.

The tax liability of a company will be higher of. 8 40 000 will amount to rs. But here only mat on company s u s 115jb is discussed. Mat is a tax levied under income tax act of india 1961.

Tax 30 on rs. Many of these investors do not pay tax on capital gains as tax treaties signed by india with some countries notably mauritius and singapore provide for an exemption from tax on gains from investing in stocks. There are several zero tax companies that book high profit but pay almost nil taxes by rolling out substantial dividends to their shareholders. 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 by the assessee shall be 18 5 on book profits.

Minimum alternate tax mat in the case of companies if tax payable on its total income as computed under the i t. I normal tax liability or ii mat.