Alternate Minimum Tax/Minimum Alternate Tax on the
person other than Company
The concept of Minimum Alternative
Tax (MAT) or Alternative Minimum Tax (AMT) has been introduced under the Income
tax to tax the “zero rate” companies i.e , company earning high profit but
paying less or no tax. It happens due to the various exemptions, deductions,
incentives granted by the Income Tax law.
Generally a company is liable to pay
MAT/AMT if its regular Income tax is less than the MAT/AMT in the previous
year.
Presently MAT provisions are
applicable to Companies and to Limited Liability partnership but other Assesee like
Individual, Hindu Undivided Family, Association of Persons or Body of Individuals are not covered under the provisions of Minimum Alternative tax, but now budget 2012-2013 proposed to substitute the present provision and make these persons liable for Alternative Minimum Tax (AMT) provided they fall in the parameter given.
Individual, Hindu Undivided Family, Association of Persons or Body of Individuals are not covered under the provisions of Minimum Alternative tax, but now budget 2012-2013 proposed to substitute the present provision and make these persons liable for Alternative Minimum Tax (AMT) provided they fall in the parameter given.
Under the proposed amendments, where the regular
income-tax payable for a previous year by a person (other
than a company) is less than the alternate minimum tax payable for such
previous year, the adjusted total income shall be deemed to be the total income
of such person and he shall be liable to pay income-tax on such total income at
the rate of eighteen and one-half per cent however it has been provided
that this provision will not apply to Individual, HUF,AOP/BOI, if their adjusted
total income does not exceed Rs.20/- lakhs in the previous year.
Condition for applicability of the
AMT/MAT can be summarized as under:-
Who is liable for AMT:-
<!--[if !supportLists]-->(1) <!--[endif]-->In case of Individual/HUF/AOP BOI,
(a) his regular income tax is less
than the alternate minimum tax for the previous year, and (b)adjusted total
Income is Rs. twenty lakhs or more during the previous year
<!--[if !supportLists]-->(2) <!--[endif]-->In other case (i.e. Partnership
Firm, LLP etc.), his regular income tax is less than the
alternate minimum tax for the previous year
Rate
of AMT :- 18.5% on Adjusted Total Income
Meaning
of Adjusted total income:-
Amount -
Rs
|
Amount -
Rs
|
||
A.
|
Total
Income (Taxable Income) in normal course
|
XXXXXXXXXX
|
|
B.
|
Add:-
Deductions claimed under chapter VI-A under the heading “C” Deduction in
respect of certain incomes:-
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<!--[if !supportLists]-->(i)
<!--[endif]-->Section 80-IA
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XXXXXXXXXX
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||
<!--[if !supportLists]-->(ii)
<!--[endif]-->Section 80 IAB
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XXXXXXXXXX
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<!--[if !supportLists]-->(iii)
<!--[endif]-->Section 80 IB
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XXXXXXXXXX
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<!--[if !supportLists]-->(iv)
<!--[endif]-->Section 80 IC
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XXXXXXXXXX
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<!--[if !supportLists]-->(v)
<!--[endif]-->Section 80 ID
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XXXXXXXXXX
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<!--[if !supportLists]-->(vi)
<!--[endif]-->Section 80 IE
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XXXXXXXXXX
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<!--[if !supportLists]-->(vii)
<!--[endif]-->Section 80 JJA
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XXXXXXXXXX
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<!--[if !supportLists]-->(viii)
<!--[endif]-->Section 80 JJAA
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XXXXXXXXXX
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<!--[if !supportLists]-->(ix)
<!--[endif]-->Section 80 LA
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XXXXXXXXXX
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<!--[if !supportLists]-->(x)
<!--[endif]-->Section 80 QQB
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XXXXXXXXXX
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<!--[if !supportLists]-->(xi)
<!--[endif]-->Section 80 RRB
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XXXXXXXXXX
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<!--[if !supportLists]-->(xii)
<!--[endif]-->Some other sections also come within
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XXXXXXXXXX
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XXXXXXXXXX
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C.
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Deduction
U/S-10AA- Applicable to SEZ Units
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XXXXXXXXXX
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Adjusted
Total Income----à
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XXXXXXXXXX
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CASE- 1
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CASE- 2
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CASE- 1
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CASE- 2
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Individual say Mr.X
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Individual say Mr.Y
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Partnership Firm-X
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Partnership Firm-Y
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||||||
Particulars
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Amount -
Rs
|
Amount -
Rs
|
Amount -
Rs
|
Amount -
Rs
|
Amount -
Rs
|
Amount -
Rs
|
Amount -
Rs
|
Amount -
Rs
|
|
A.
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Total
Income (Taxable Income) in normal course
|
1250000
|
1250000
|
150000
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150000
|
||||
B.
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Add:- Deductions
claimed under chapter VI-A under the heading “C” Deduction in respect of
certain incomes:-
|
||||||||
(i)
Section
80-IA
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200000
|
200000
|
200000
|
200000
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|||||
(ii)
Section
80 IAB
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40000
|
400000
|
400000
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||||||
(iii)
Section
80 IB
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|||||||||
(iv)
Section
80 IC
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|||||||||
(v)
Section
80 ID
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|||||||||
(vi)
Section
80 IE
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100000
|
300000
|
300000
|
||||||
(vii)
Section
80 JJA
|
|||||||||
(viii)
Section
80 JJAA
|
|||||||||
(ix)
Section
80 LA
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|||||||||
(x)
Section
80 QQB
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|||||||||
(xi)
Section
80 RRB
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|||||||||
(xii)
Some
other sections also come within
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340000
|
900000
|
200000
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900000
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|||||
C.
|
Deduction
U/S-10AA- Applicable to SEZ Units
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0
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0
|
||||||
Adjusted Total Income----à
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1590000
|
2150000
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350000
|
1050000
|
|||||
MAT @18.5% on Adjusted Total Income
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(A)
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294150
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397750
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64750
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194250
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||||
Regular Income Tax
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(B)
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272950
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272950
|
108150
|
108150
|
||||
Condition
1
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If
Adjusted total Income >= Rs.20 lakhs
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No
|
MAT NOT
APPLICABLE
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YES
|
MAT
APPLICABLE
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N.A.
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No need
to meet this condition
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N.A.
|
No need
to meet this condition
|
Condition
2
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If (B)
is less than (A)
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Yes
|
MAT
APPLICABLE
|
YES
|
MAT
APPLICABLE
|
NO
|
MAT NOT
APPLICABLE
|
YES
|
MAT
APPLICABLE
|
Conclusion
|
Not
applicable
|
APPLICABLE
|
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Tax On Regular Income
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|||||||||
In
Normal course
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Individual/HUF
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Partnership or others except company
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|||||||
Rate of
Tax
|
Income
slab
|
Tax on
slab
|
Rate of
Tax
|
||||||
Nil up to
Rs.2,00,000/-
|
up to Rs.200000
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0
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30%
|
105000
|
|||||
@10% From Rs.200001 to Rs.5,00,000/-
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3,00,000
|
30000
|
|||||||
@20% From Rs.500001 to Rs.10,00,000/-
|
5,00,000
|
100000
|
|||||||
@30% Beyond
Rs.10,00,000/-
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4,50,000
|
135000
|
|||||||
Total
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12,50,000
|
265000
|
|||||||
Add
:-Education Cess & SHEC @3% on I.Tax
|
7950
|
3150
|
|||||||
Regular
Income Tax
|
(B)
|
272950
|
108150
|
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