Select Your Location
Tax is the primary source of revenue for the Government of India. The Indian government has given its taxpayers the benefit of multiple deductions and incentives to encourage tax payment. This facility resulted in some companies becoming “zero tax-paying” units, which ultimately resulted in a loss of revenue for the government. The concept of Alternate Minimum Tax was introduced to maintain a balance between introductions of such deductions and to ensure the levy of tax on such zero tax companies.
Table of Contents
Alternative Minimum Tax, as the name suggests, means the minimum
amount of tax that
is levied on income as opposed to the usual amount of
tax. Such tax is paid at the rate of 18.5% plus applicable surcharge and cess. AMT is levied on adjusted income in a financial year
in case the tax payable on regular income is
less than AMT on adjusted total income.
governed and regulated under Section 115JC of Income Tax
Adjusted Total income for Alternative Minimum Tax is a gross income that is increased by adding back all the deduction covered under Heading C of Chapter -VI. Thus, all the deduction from 80HH to 80RRB is added back to the Gross Income except Section 80P and 10AA.
the concept of AMT was introduced to bring
only the corporates under its ambit. Gradually, it was
made applicable to non-corporate taxpayers as well. At present provisions of
AMT are applicable on the following:
of AMT are applicable in case Normal Tax Payable is lower than AMT in any
Financial Year. Also, provisions of AMT apply only to those non-corporate taxpayers having taxable income under
the head of Profit & Gains from Business and Profession (PGBP).
Exemption from the applicability
Provisions of AMT do not apply to the following:
AMT is payable as per section 115JD of the Income Tax Act in case the normal amount of tax payable is less than the tax payable under AMT. Any difference
between Normal Tax Payable and tax paid as per
the provisions of AMT is allowed as an AMT credit. Such credit can be adjusted
with normal tax liability arising in subsequent or future year in which normal
tax payable exceeds AMT.
During any financial year, such tax credit is allowed to be set
off to the extent of the excess of regular income tax over and above the tax payable under the provisions of AMT.
Following conditions are to be satisfied for claiming AMT credit:
Recommended Article: The Amazing History of Income Tax in India- Read Now.
"Savvy Midha holds the degrees of Bachelor of Commerce(honors), LL.B and Company Secretary. She is an experienced Legal and Financial writer with expertise in research, drafting, and copy-writing."
Black money has been the subject of heated political debate in India for a long time. Successiv...
The Apex Court pronounced a judgement in the case titled Tata Motors Vs The Brihan Mumbai Elect...
Since economies are moving towards digitalisation and making it feasible to conduct transaction...
The Alternative Investment Funds (AIFs) Pro-rata and Pari-Passu Rights Proposal Consultation Pa...
The Financial Action Task Force, i.e. FATF (the Force), is the global money laundering and terr...
Advance tax refers to the payment of the tax liability before the end of the relevant financia...
On 11.12.15, the Hon’ble Delhi High Court (HC) pronounced a landmark judgement in the case ti...
Money laundering can be defined as the process of illegal concealment of the origin of money ob...
Every assessee in India is obligated to file an income tax return and make the timely payment o...
In the recent past, India has seen burgeoning demand for internet and smartphones. The rapid ri...
Collection strategies are the services that maintain the balance in the lending process and cordial client relation...
14 Sep, 2022
IFRS 9 is effective for the fiscal years beginning on or after January 1st, 2018, while early adoption is also perm...
06 Apr, 2022
Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
Stay updated with all the latest legal updates. Just enter your email address and subscribe for free!