InvestorQ : What is minimum alternate tax (MAT)?
ananya Sing made post

What is minimum alternate tax (MAT)?

Anusha Savla answered.
2 years ago

MAT or minimum alternate tax is a tax levied by the government of India to facilitate the taxation of zero-tax companies or those companies that show zero or negligible income in order to avoid paying tax.

The tax is categorically directed towards those companies that make huge profits and even pay dividends to their shareholders but pay no tax under the Income Tax Act. Companies do this by taking advantage of the various deductions and exemptions that the Income Tax Act allows.

Ever since the MAT came in to effect, companies must pay a fixed percentage of their profits as MAT.