Question

What is MAT? Briefly explain the procedure for fruit flies ecofriendly management, ​

Answer 1

Answer:

Alternative minimum tax

The alternative minimum tax is a tax imposed by the United States federal government in addition to the regular income tax for certain individuals, estates, and trusts.

Minimum Alternative Tax is payable under the Income Tax Act. The concept of MAT was introduced to target those companies that make huge profits and pay the dividend to their shareholders but pay no/minimal tax under the normal provisions of the Income Tax Act, by taking advantage of the various deductions, and exemptions allowed under the Act.

But with the introduction of MAT, the companies have to pay a fixed percentage of their profits as Minimum Alternate Tax. MAT is applicable to all companies, including foreign companies. MAT is calculated under Section 115JB of the Income-tax Act.

Every company should pay higher of the tax calculated under the following two provisions:

1. Tax liability as per the Normal provisions of income tax act (tax rate 30% plus 4% eEdu. cess plus surcharge (if applicable)

Tax liability for the domestic companies is 25% plus 4% cess and applicable surcharge, as per the normal provisions of the Income Tax Act whose turnover or gross receipts is upto Rs. 400 crore

2. Tax liability as per the MAT provisions are given in Sec 115JB (The tax rate is 15% of Book Profits plus 4 % education cess plus a surcharge, if applicable, with effect from AY 2020-21 (FY 2019-20))Prior to FY 2019-20, the MAT rates were 18.5 %