Provisions of MAT - Rates - [Section 115JB(1)] - Income Tax - Ready Reckoner - Income Tax

Section 115JB(1) : Charging Section Notwithstanding anything contained in any other provisions of the Income Tax Act, where in the case of the company, the income-tax, payable on the total income as computed under the Income-tax Act in respect of any assessment year is less than 15% of its book profits, such book profits shall be deemed to be the total income of the assessee and the tax payable on such total income shall be the amount of income-tax at the rate of 15%. Thus in case of a domestic company , the income tax payable shall be the higher of the following amounts: Tax on total income computed as per the normal provisions of the income tax act by charging applicable normal rates and special rates if any income included in the total income of the company is taxable at special rates. 15% of the Book Profits plus 7% surcharge where book profits exceed Rs. 1 crore and surcharge of 12% where book profits exceeds Rs. 10 crore, Note: MAT is levied at the rate of 9% (plus surcharge and cess as applicable) in case of a company, being a unit of an International Financial Services Centre and deriving its income solely in convertible foreign exchange. In case of foreign companies , the income tax payable shall be higher of the following amounts : Tax on total income computed as per the normal provisions of the income tax act plus surcharge of 2% where total income exceeds Rs. 1 crore and surcharge of 5% where total income exceeds Rs. 10 crore. 15% of the Book Profits plus 2% surcharge where book profits exceed Rs. 1 crore surcharge of 5% where book profits exceeds Rs. 10 crore. AMENDMENT : Inserted vide Taxation Laws (Amendment) Ordinance, 2019 w.e.f. 01-04-2020 (MAT Rate has been changed to 15% in place of 18.5%).