MAT — Minimum Alternate Tax
What it means
MAT (section 115JB) ensures companies with substantial book profits but low taxable income (due to deductions and incentives) pay a minimum tax — 15% of book profit — with the excess over normal tax available as MAT credit to carry forward.
Where you meet it in the CA course
CA Final Direct Tax tests book-profit computation (additions and deletions to net profit) and MAT credit mechanics; Intermediate introduces the concept. Companies opting for section 115BAA/115BAB concessional rates are outside MAT.
Worked example
Normal tax ₹8 lakh but MAT on book profit ₹12 lakh → company pays ₹12 lakh and carries forward ₹4 lakh MAT credit for up to 15 assessment years.
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Talk to usWhat is the current MAT rate?
15% of book profit (plus surcharge and cess) under section 115JB, reduced from 18.5% by the Taxation Laws (Amendment) Act, 2019.
Does MAT apply to companies under section 115BAA?
No. Companies opting for the 22% concessional regime under 115BAA (or 15% under 115BAB for new manufacturing) are expressly excluded from MAT.