Mat Tax Rate Surcharge

Mat is levied at the lower rate of 9 plus surcharge and cess as applicable for companies that are a unit of an international financial services centre and derive their income solely in convertible foreign exchange.

Mat tax rate surcharge.

The government has reduced or slashed corporate tax rates up to 15 percentage points the new corporate income tax rates for existing companies has been. Minimum alternate tax mat. Mat liability excluding cess and surcharge. I normal tax liability or ii mat.

Book profit of the company is rs. Tax 30 on rs. What will be the tax liability of essem minerals pvt. Later it needs to be compared with tax computed 18 5 plus surcharge and cess as applicable on the book profit.

Book profit of the company is rs. However the surcharge shall be subject to marginal relief where income exceeds one crore rupees the total amount payable as income tax and surcharge shall not exceed total amount payable as income tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees. The amount of income tax shall be increased by a surcharge at the rate of 12 of such tax where total income exceeds one crore rupees. I normal tax liability or ii mat.

For calculating the tax outflow of company first the tax is required to be calculated as per the normal provisions under the income tax act. Normal tax rate applicable to an indian company is 30 plus cess and surcharge as applicable. Ignore cess and surcharge. The new corporate income tax rates for assessment year 2020 21 or ay 2020 21 previous year or financial year 2019 20 are introduced by taxation laws amendment bill 2019 by amending the income tax act 1961 and the finance no 2 act 2019.

The tax liability of a company will be higher of. Tax 30 on rs. Also on the revised mat rate of 15 per cent existing surcharge levy of 7 and 12 per cent shall apply. Normal tax rate applicable to an indian company is 30 plus cess and surcharge as applicable.

28 40 000 will amount to rs. I normal tax liability or ii mat. 8 40 000 will amount to rs. Now compute tax payable as per mat provisions tax payable 18 5 surcharge 7 19 795 of 1 01 00 000 19 99 295.

Since income exceeds 1 crore marginal relief is to be calculated i e. It means the rate of mat is reduced to 15 percent from the ay 2020 21 itself. Tax 30 on rs. The amount of tax and surcharge cannot exceed the tax calculate under marginal relief.

The tax liability of a company will be higher of. The tax liability of a company will be higher of. Normal tax rate applicable to an indian company is 30 plus cess and surcharge as applicable. Hence the effective tax rate after surcharge and cess under mat would come to 15 6 16 69.

However the rate of income tax under section 115jb shall be reduced rate of 15 percent instead of 18 5 per cent with effect from assessment year commencing on or after the 1st day of april 2020.