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MAT - Introduction - Income Tax - Ready Reckoner - Income TaxExtract MINIMUM ALTERNATE TAX Law makers observed that there are many companies which are disclosing massive profit in the accounts as laid in the Annual General Meeting (AGM) before the shareholder but at the same time these companies also showing profit nil or bit above nil for the income tax purpose. Variance between profits as per the Companies Act and as per Income Tax Act was due to many dissimilar allowance or disallowance in the both Acts e.g. difference in method and rate of depreciation provided in both Acts. To put an end on this trend and bring these kind of companies under the tax net, law maker framed concept of MAT, according to this concept corporate entity has to pay minimum tax. The objective of introduction of MAT is to bring into the tax net zero tax companies which in spite of having earned substantial book profits and having paid handsome dividends, do not pay any tax due to various tax concessions and incentives provided under the Income-tax Law. The concept of MAT is govern by the provisions contains in section 115JB of the Income Tax Act,1961 .
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