What is MAT in Taxation?
What is MAT in Taxation? MAT stands for Minimum Alternate Tax. Initially, the concept of MAT was introduced for companies and progressively it has been made applicable to all other taxpayers in the form of AMT(Alternative Minimum Tax). Objective of levying MAT At times it may happen that a taxpayer, being a company, may have generated income during the year, but by taking the advantage of various provisions of Income-tax Law (like exemptions, deductions, depreciation, etc.), it may have reduced its tax liability or may not have paid any tax at all. Due to increase in the number of zero tax paying companies, MAT was introduced by the Finance Act, 1987 with effect from the assessment year 1988-89. Later on, it was withdrawn by the Finance Act, 1990 and then reintroduced by Finance (No. 2) Act, 1996, wef1-4-1997. The objective of introduction of MAT is to bring into the tax net "zero tax companies" which in spite of having earned substantial book profits an...
