Mat Full Form In Tax

The key reason for introduction of mat is to ensure minimum levels of taxation for all domestic and foreign companies in india.

Mat full form in tax. Top mat abbreviation related to tax. Minimum alternate tax mat was introduced in the direct tax system to make sure that companies having large profits and declaring substantial dividends to shareholders but who were not contributing to the govt by way of corporate tax by taking advantage of the various incentives and exemptions provided in the income tax act pay a fixed percentage of book profit as minimum alternate tax. Tax mat abbreviation meaning defined here. Mat is mostly targeted to the r d companies and export oriented units.

With mat companies have to pay up a minimum amount of tax to the government. 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. In terms of taxation mat minimum alternate tax it is a tax that has to be paid by the companies that are enjoying tax benefits or tax exemption under various schemes. Full form of mat.

It was introduced in the year 1987 and. What is minimum alternate tax with example. Minimum alternative tax is payable under the income tax act. Mat is a provision in direct tax laws to limit tax exemptions availed by companies so that they pay at least a minimum amount of corporate tax to the government.

Mat rate has been progressively increased from 7 5 in 2000 to 18 5 in 2015. Mat is applied when the taxable income calculated as per the normal provisions in the it act is found to be less than 18 5 of the book profits. Mat is levied at the rate of 18 5 of the book profits. Mat or minimum alternate tax is a provision in direct tax laws to limit tax exemptions availed by companies so that they pay at least a minimum amount of corporate tax to the government.