Mat Stands For In Tax

Payment of no tax or less tax by the assessee in spite of earning substantial book profit because of various exemptions concessions or and incentives provided under income tax law.

Mat stands for in tax. Mat stands for minimum alternate tax and it was launched to reduce if not to bridge the gap between the tax accountability as per income calculation and book profits. Initially the concept of mat was introduced for companies and progressively it has been made applicable to all other taxpayers in the form of amt. A value added tax vat is a consumption tax placed on a product whenever value is added at each stage of the supply chain from production to the point of sale. Tax mat abbreviation meaning defined here.

What does mat mean. Top mat abbreviation related to tax. 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. Under the provisions of section 115jb where the income tax calculated under the income tax act is less than 18 5 of the book profit then such book profit shall be deemed to the total income of the assessee and tax payable by the assessee shall be 18 5 on book profits.

What does mat stand for in tax. Governing section of income tax act 1961. The key reason for introduction of mat is to ensure minimum levels of taxation for all domestic and foreign companies in india. Mat stands for minimum alternate tax described as a direct tax that has to be paid by the companies that are enjoying tax benefits or tax exemptions instead of having huge profits under various schemes framed under income tax act.

Mat stands for minimum alternate tax and amt stands for alternate minimum tax. But here only mat on company s u s 115jb is discussed. In this part you can gain knowledge about various provisions relating to mat and amt. In this article let us explore how tax planning under mat works.