MAT credit not available to companies opting for lower corporate tax rate
PrintListen to this Article
MAT is the minimum tax to be paid by companies that keep their taxable profit low by using tax breaks.
According to an ordinance promulgated on 20 September, manufacturing companies not availing of tax benefits can now opt for a 22% corporate tax rate. New manufacturing companies that register and start production between 1 October and March 2023 can avail of an even lower tax rate of 15%. Finance minister Nirmala Sitharaman also announced a reduction in MAT from 18.5% to 15%.
At present, business income is taxed at 30%, exclusive of cess and surcharge, other than in the case of companies with sales of up to ₹400 crore and new manufacturing companies that are taxed at 25%. Now, the effective tax rate, including cess and surcharges, for the existing companies comes down from 34.94% to 25.17%, while for new companies it falls from 29.12% to 17.01%.
The low tax rates of 22% and 15% are available to companies only if they do not avail of any tax incentives, and therefore there is little chance of them lowering their tax outgo further using incentives.
Experts said there were different interpretations pertaining to some aspects in the ordinance and a clarification by the CBDT will give much-needed clarity to companies as some of them believed credit can be claimed even after opting for lower taxes.. #casansaar (Source - PTI, LiveMint)
CLICK HERE FOR NOTIFICATION/CIRCULAR
Category : Income Tax | Comments : 0 | Hits : 506
If you earn income other than salary or have multiple income streams, the advance tax deadline falling today—Monday, December 15, 2025—should not be overlooked. Failure to pay advance tax on time, or paying less than the required amount, may attract interest charges that continue to accumulate. As the Income Tax Act operates on a “pay as you earn” basis, being aware of advance tax provisions and the financial impact of delays can help you avoid unnecessary costs and last-...
If you earn income other than salary or have multiple income streams, the advance tax deadline falling today—Monday, December 15, 2025—should not be overlooked. Failure to pay advance tax on time, or paying less than the required amount, may attract interest charges that continue to accumulate. As the Income Tax Act operates on a “pay as you earn” basis, being aware of advance tax provisions and the financial impact of delays can help you avoid unnecessary costs and last-...
As many as 5,44,205 appeals were pending resolution with the Income Tax (IT) Department at commissioner (appeals) level as of January 31 this year, and 63,246 at various Income Tax Appellate Tribunals (ITATs), High Courts, and the Supreme Court, FE has learnt. To be precise, the cases pending in ITATs were 20,266 High Courts, 37,436; and Supreme Court 5,544. The large pendency is even as the Central Board of Direct Taxes (CBDT) has laid emphasis on disposing of income tax appeals in its 10...
The Central Board of Direct Taxes (CBDT) has facilitated taxpayers to file their Income Tax Returns (ITRs) for the Assessment Year 2024-25 (relevant to Financial Year 2023-24) from 1st April, 2024 onwards. The ITR functionalities i.e. ITR-1, ITR-2 and ITR-4, commonly used by taxpayers are available on the e-filing portal from 1st April, 2024 onwards for taxpayers to file their Returns. Companies will also be able to file their ITRs through ITR-6 from April 1 onwards. As ...
It has come to notice that misleading information related to new tax regime is being spread on some social media platforms. It is therefore clarified that the new regime under section 115BAC(1A) was introduced in the Finance Act 2023 which was as under as compared to the existing old regime (without exemptions): New Regime 115BAC (1A) introduced for FY 2023-24 Existing old Regime 0-3 lacs 0% 0-2.5 lacs 0% ...
Comments