Lowest applicable MAT of the current prosecutor, FM clarifies
New Delhi, December 2 () Finance Minister Nirmala Sitharaman said on Monday that the lowest minimum alternative tax rate (MAT) of 15 percent announced as part of the corporate tax rate cuts in September It will be applicable from the current financial year.
She made the statement in the Lok Sabha to clarify a typo in the Tax Laws (Amendment Bill), 2019, which said that the reduced MAT will take effect from the next financial year beginning April 1, 2020 .
The intention, he said, has always been to apply a reduced MAT rate since 2019-20.
The intention again was always to apply a reduced MAT rate of 15 percent since 2019-20. So the correction or error that has been introduced will now be corrected through the official amendment now. Therefore, it is applied from 2019-20 the original intention was that. It's still like that even now, he said.
The bill, as amended, was then approved by a voice vote in the Lok Sabha. The bill replaces an ordinance that made the corporate tax reduction.
For companies that continue to use exemptions/incentives, the MAT has been reduced from 18.5 percent to 15 percent.
MAT is the minimum tax that companies must pay in case their normal tax obligation after claiming deductions falls below a certain limit.
Sitharaman also said that the bill has a specific intention to attract investments in manufacturing.
At this time, our specific objective is to attract manufacturing companies around the world, he said.
However, companies in the service sector would benefit from the 22 percent concessionary tax regime extended to all existing national companies, the minister added. In addition, they can also benefit from the reduced 15 percent MAT rate that would be applicable to all companies that do not choose to pay taxes in the favorable tax regime, the minister said. DP NKD CS HRS