Minimum Alternate Tax (MAT)
Section 115JB of the Income Tax Act
Minimum Alternate Tax was introduced in India in 1987 (and later restructured under Section 115JB in 2000) to ensure that companies reporting significant book profits but paying zero or minimal tax through various exemptions and deductions still pay a minimum level of tax. MAT is computed on "book profit" — the net profit as shown in the profit and loss statement prepared under Schedule III of the Companies Act, 2013, adjusted by prescribed additions and deductions. If a company's tax liability under normal provisions is less than the MAT amount, the company is required to pay MAT.
- MAT under Section 115JB: applies to all companies (except those opting for Sections 115BAA/115BAB)
- Rate trajectory: 7.5% (1987) → 10% (2000) → 15% (post-2007) → 18.5% (2010-2019) → 15% (AY 2020-21 onwards) → 14% (Budget 2026)
- Book profit = Net profit as per P&L + prescribed additions (income tax provisions, depreciation, etc.) - prescribed deductions (loss brought forward, unabsorbed depreciation, etc.)
- MAT applies to companies as a concept; for non-corporate taxpayers, the equivalent is Alternate Minimum Tax (AMT) under Section 115JC
- International Financial Services Centre (IFSC) units: MAT rate of 9%
● Tracked since February 10, 2026 · last seen March 31, 2026 · updates as the daily brief publishes
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