MAT
Fifteen per cent of book profit against normal tax, and the credit that carries forward for fifteen years.
Schedule III profit after the additions and reductions in section 115JB. The checklist is below.
Including its own surcharge and cess.
Income solely in convertible foreign exchange.
Tax payable
₹33,38,400.00
Minimum alternate tax is higher, so it is what is payable.
| MAT at 15% of book profit | ₹30,00,000.00 |
|---|---|
| Surcharge at 7%Set by book profit, not by total income. | ₹2,10,000.00 |
| Cess at 4% | ₹1,28,400.00 |
| Minimum alternate tax | ₹33,38,400.00 |
| Normal tax | ₹24,96,000.00 |
| Tax payable — the higher | ₹33,38,400.00 |
| MAT credit carried forwardAvailable against normal tax for 15 assessment years. | ₹8,42,400.00 |
| Effective rate on book profit | 16.692% |
How this worksShow
Two surcharges on two different figures
This is the line that gets queried. Surcharge on minimum alternate tax is decided by book profit; surcharge on normal tax is decided by total income. A company with book profit of two crore and total income of eighty lakh carries 7% on one side and nil on the other, inside one computation, and nothing has gone wrong.
| Rule | Figure | Statutory basis |
|---|---|---|
| Rate | 15% of book profit | s.115JB(1), Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| IFSC unit, income in convertible forex | 9% | s.115JB(7), Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| Surcharge | set by book profit | Finance Act, read with s.115JB, Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| Liability | the higher of the two | s.115JB(1), Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| Credit | carried 15 years | s.115JAA(3A), Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| Concessional regime | does not apply | s.115JB(5A), Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
Book profit is asked for, not worked out
Deriving book profit needs a dozen additions and half a dozen reductions, each of which comes from figures only the company’s own accounts hold. A public page cannot ask for those and must not guess at them, so this one takes the figure and shows the checklist instead — a form of twenty optional fields, most left blank, would produce a confident answer from an incomplete book profit.
- Add back:
- Income tax paid or payable, and the provision for it
- Deferred tax and the provision for it
- Amounts carried to any reserve
- Provisions for unascertained liabilities
- Provision for losses of subsidiary companies
- Dividends paid or proposed
- Expenditure relating to income exempt under section 10, other than section 10(38)
- Depreciation, including that on revaluation of assets
- Then reduce by:
- Amounts withdrawn from any reserve, where the reserve was added back
- Income exempt under section 10, other than section 10(38)
- Depreciation, excluding that on revaluation of assets
- The lower of brought-forward loss and unabsorbed depreciation, as per the books
- Profit of a sick industrial company, on the terms in the section
| Rule | Figure | Statutory basis |
|---|---|---|
| Book profit is Schedule III profit as adjusted | see the list | s.115JB(2) and its Explanation 1, Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
Not applicable is not nil
A company that has elected section 115BAA or 115BAB is outside section 115JB altogether. This page says so in words rather than showing a computed ₹0.00, because the two mean different things: one says the section was applied and came to nothing, the other says it was never in play.
Electing also lapses any MAT credit in hand, which is the part a rate comparison misses — a company carrying eight lakh of credit gives it up on the day it elects, and the election cannot be undone. The regime comparator sets that out beside the difference in rate.
Rates and thresholds as at 10 September 2026. This page is an estimate, not professional advice, and it is not a filing.
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