InvestorQ : With the CBDT circular on MAT, what is it that companies can do and what is it that the government should do?
Aashna Tripathi made post

With the CBDT circular on MAT, what is it that companies can do and what is it that the government should do?

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swati Bakhda answered.
2 years ago
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There are two options that the companies have. Firstly, they can opt to shift to the new system where they pay 22% tax profits plus cess and surcharge. But that would work if the actual exemptions and MAT credits are limited. Others will delay the onset of 22% formula till past MAT credits are fully availed. The government can actually do its bit.

The answer is to give a one-time exemption because if the big guns don’t join then the new system loses its importance. The absence of large companies in the 22% formula dilutes its impact. Government can work out a mid-way. It can consider giving companies a one-time exemption on available MAT credits to facilitate a shift to the 22% formula. It can be amortized over a longer period of time so that it will not hit government revenues and give comfort to companies that legitimate credits will not be lost.

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