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Question
Consider the following statements with respect to Minimum Alternate Tax(MAT) :
1. MAT was first introduced in India in 1992.
2. MAT was introduced to reduce tax avoidance.
Select the correct statement/s from above.
Consider the following statements with respect to Minimum Alternate Tax(MAT) :
1. MAT was first introduced in India in 1992.
2. MAT was introduced to reduce tax avoidance.
Select the correct statement/s from above.
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Solution
The correct option is B 2 only
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Companies try to minimise paying taxes by taking advantage of depreciation, deductions, exemptions etc. from the government. So the government imposes a Minimum Alternate Tax or MAT as an advance tax on these companies.
MAT is a tax effectively introduced in India in 1987, to facilitate the taxation of such ‘zero tax companies’ i.e., those companies which show zero or negligible income to avoid tax.
The corresponding tax similar to MAT, but imposed on individuals or non-corporate entities, who claim certain deductions under the IT Act is known as Alternate
Minimum Tax (AMT).
<!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> Companies try to minimise paying taxes by taking advantage of depreciation, deductions, exemptions etc. from the government. So the government imposes a Minimum Alternate Tax or MAT as an advance tax on these companies.
MAT is a tax effectively introduced in India in 1987, to facilitate the taxation of such ‘zero tax companies’ i.e., those companies which show zero or negligible income to avoid tax.
The corresponding tax similar to MAT, but imposed on individuals or non-corporate entities, who claim certain deductions under the IT Act is known as Alternate
Minimum Tax (AMT).
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