Question

Minimum Alternate Tax (MAT) is imposed by the Indian Government in addition to which one of the following tax?

• A. Personal Income tax
• B. Corporation tax
• C. Service tax
• D. Expenditure tax

Answer 1

The correct option is B Corporation tax

Minimum Alternate Tax (MAT) is a tax effectively introduced in India by the Finance Act of 1987, vide Section 115J of the Income Tax Act, 1961 (IT Act), to facilitate the taxation of ‘zero tax companies’ i.e., those companies which show zero or negligible income to avoid tax. Under MAT, such companies are made liable to pay to the government, by deeming a certain percentage of their book profit as taxable income.