Tuesday, December 30, 2014

All About MAT (Minimum Alternate Tax) & AMT (Alternate Minimum Tax)


MAT stands for Minimum Alternate Tax and AMT stands for Alternate Minimum Tax. Initially the concept of MAT was introduced for companies and progressively it has been made applicable to all other taxpayers in the form of AMT. In this part you can gain knowledge about various provisions relating to MAT and AMT. First of all we will understand the provisions of MAT and thereafter the provisions of AMT.

Objective of levying MAT
At times it may happen that a taxpayer, being a company, may have generated income during the year, but by taking the advantage of various provisions of Income-tax Law (like exemptions, deductions, depreciation, etc.), it may have reduced its tax liability or may not have paid any tax at all. Due to increase in the number of zero tax paying companies, MAT was introduced by the Finance Act, 1987 with effect from assessment year 1988-89. Later on, it was withdrawn by the Finance Act, 1990 and then reintroduced by Finance (No. 2) Act, 1996, wef1-4-1997.

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.

Since the introduction of MAT, several changes have been introduced in the provisions of MAT and today it is levied on companies as per the provisions of section 115JB.

Basic provisions of MAT
As per the concept of MAT, the tax liability of a company will be higher of the following:
  • Tax liability of the company computed as per the normal provisions of the Income-tax Law, i.e., tax computed on the taxable income of the company by applying the tax rate applicable to the company. Tax computed in above manner can be termed as normal tax liability.
  • Tax computed @ 18.5% (plus surcharge and cess as applicable) on book profit (manner of computation of book profit is discussed in later part). The tax computed by applying 18.5% (plus surcharge and cess as applicable) on book profit is called MAT.
Illustration
The taxable income of Essem Minerals Pvt. Ltd. computed as per the provisions of Income-tax Act is Rs. 8,40,000. Book profit of the company computed as per the provisions of section 115JB is Rs. 18,40,000. What will be the tax liability of Essem Minerals Pvt. Ltd. (ignore cess and surcharge)?

**
The tax liability of a company will be higher of: (i) Normal tax liability, or (ii) MAT. Normal tax rate applicable to an Indian company is 30% (plus cess and surcharge as applicable). Tax @ 30% on Rs. 8,40,000 will amount to Rs. 2,52,000 (plus cess). Book profit of the company is Rs.18,40,000. MAT liability (excluding cess and surcharge) @ 18.50% on Rs.18,40,000 will come to Rs. 3,40,400.

Thus, the tax liability of Essem Minerals Pvt. Ltd. will be Rs. 3,40,400 (plus cess as applicable) being higher than the normal tax liability.

Illustration
The taxable income of SM Energy Pvt. Ltd. computed as per the provisions of Income-tax Act is Rs. 28,40,000. Book profit of the company computed as per the provisions of section 115JB is Rs. 18,40,000. What will be the tax liability of SM Energy Pvt. Ltd. (ignore cess and surcharge)?
**
The tax liability of a company will be higher of: (i) Normal tax liability, or (ii) MAT. Normal tax rate applicable to an Indian company is 30% (plus cess and surcharge as applicable). Tax @ 30% on Rs. 28,40,000 will amount to Rs. 8,52,000 (plus cess). Book profit of the company is Rs. 18,40,000. MAT liability (excluding cess and surcharge) @ 18.50% on Rs.18,40,000 will come to Rs. 3,40,400.
Thus, the tax liability of SM Energy Pvt. Ltd. will be Rs. 8,52,000 (plus cess as applicable), being higher than the MAT liability.

Applicability and non-applicability of MAT
As per section 115JB, every taxpayer being a company is liable to pay MAT, if the Income- tax(including surcharge and cess) payable on the total income, computed as per the provisions of the Income-tax Act in respect of any year is less than 18.50% of its book-profit + surcharge (SC) + education cess (EC) + secondary and higher education cess.

From the above it can be observed that the provisions of MAT are applicable to every company whether public or private and whether Indian or foreign. However, as per section 115JB(5A) MAT shall not apply to any income accruing or arising to a company from life insurance business referred to in section 115B. Further, as per provisions of Section 115V-O the provisions of MAT will not apply to a shipping income liable to tonnage taxation, i.e., tonnage taxation scheme as provided in section 115V to 115VZC.

Meaning of book profit
As per Explanation 1 to section 115JB(2) "book profit" for the purposes of section 115JB means net profit as shown in the P & L Account prepared in accordance with Schedule VI of the Companies Act [now Schedule III to the Companies Act, 2013] as increased and decreased by certain items prescribed in this regard. The items to be increased and decreased are as follows :

Computation of book profit

PARTICULARS : AMOUNT
Net profit as per Profit & Loss A/c prepared in accordance with Schedule 
VI to the Companies Act[now Schedule III to the Companies Act, 2013]                   XXXXX

Add : Following items (if they are debited to the P & L A/c)
Income-tax paid/payable and the provision thereof (*)                                                 XXXXX
Amounts carried to any reserves by whatever name called (Other than reserve 
specified under Section 33AC)                                                                                    XXXXX
Provisions for unascertained liabilities                                                                           XXXXX
Provisions for losses of subsidiary companies                                                               XXXXX
Dividends paid/proposed                                                                                             XXXXX
Expenditure related to incomes which are exempt under section 10 
[other than section 10(38)] section 11 and section 12                                               XXXXX
Amount of depreciation debited to P & L A/c                                                               XXXXX
Deferred tax and the provision thereof                                                                           XXXXX
Provision for diminution in the value of any asset                                                            XXXXX
The amount standing in revaluation reserve relating to revalued asset on the 
retirement or disposal of such an asset if not credited to profit and loss account             XXXXX
Less : Following items (if they are credited to the P & L A/c)
Amount withdrawn from any reserve or provision if credited to P&L account (**)        (XXXXX)
Incomes which are exempt under section 10 [other than section 10(38)] 
section 11 and section 12                                                                                            (XXXXX)
Amount of depreciation debited to P&L account (excluding the depreciation 
on revaluation of assets)                                                                                              (XXXXX)
Amount withdrawn from revaluation reserve and credited to P&L account to 
the extent it does not exceed the amount of depreciation on revaluation of assets    (XXXXX)
Amount of brought forward loss or unabsorbed depreciation, whichever 
is less as per books of account                                                                                  (XXXXX)
Profits of a sick industrial company till its net worth becomes zero/positive          (XXXXX)
Deferred tax, if credited to P&L account                                                                  (XXXXX)
Book profit to be used to compute MAT                                                                  XXXXX

(*) The amount of Income-tax shall include:
  1. Any tax on distributed profits under section 115-O (dividend distribution tax - i.e., DDT) or tax on distributed income under section 115R;
  2. Any interest charged under this Act;
  3. Surcharge, if any, as levied by the Central Actsfrom time-to-time;
  4. Education Cess on Income-tax, if any, as levied by the Central Acts from time-to-time; and
  5. Secondary and Higher Education Cess on Income-tax, if any, as levied by the Central Acts from time-to-time.
(**) Withdrawals made from reserves created or provisions made on or after the 1-4-1997, shall be deducted only if the book profit of the year of creation of such reserve has been increased by the amount transferred to such reserve or provisions (out of which the said amount was withdrawn).

For example, Governmental grants relatingto depreciable assets are credited to special reserve (i.e., not to P&L account) in the year of receipt and a portion of such grant is transferred from that reserve to P&L account over the life of the asset in proportion to depreciation charged. In the year in which these grants were credited to special reserve, they had not been added to net profit for calculation of book profit subjected to MAT. Therefore, in the year of transfer to P&L the amounts so transferred shall not be reduced from net profit while calculating book profit for the purpose of MAT.

MAT credit
As discussed in earlier part, a company has to pay higher of normal tax liability or liability as per MAT provisions. If in any year the company pays liability as per MAT, then it is entitled to claim credit of MAT paid over and above the normal tax liability in the subsequent year(s).The provisions relating to carry forward and adjustment of MAT credit are given in section 115JAA.

Illustration
The tax liability of Essem Minerals Ltd. for the financial year 2014-15 under the normal provisions of the Income-tax Act is Rs. 8,40,000 and the liability as per the provisions of MAT is Rs. 10,00,000. Will the company be entitled to claim any MAT credit in the subsequent year(s) as per the provisions of section 115JAA?
**
A company paying MAT is entitled to claim the credit of MAT paid in excess of normal tax liability. In this case the liability of Essem Minerals Ltd. for the year 2014-15 under the normal provisions is Rs. 8,40,000 and as per the provisions of section 115JB it is Rs. 10,00,000 (which is higher than normal tax liability) and, hence, the company has to pay Rs. 10,00,000, i.e., liability as per MAT provisions.

As per section 115JAA, if in any year a company pays its tax liability as per MAT, then it can claim MAT credit being the excess MAT paid over the normal tax liability. In this case, as the liability of MAT is higher, and, hence, the company will be entitled to claim MAT credit of Rs. 1,60,000 (being excess of MAT over normal tax liability of Rs. 8,40,000).

Adjustment of carried forward MAT credit
As discussed earlier, a company is entitled to claim MAT credit i.e. excess of MAT paid over the normal tax liability. The credit of MAT can be utilised by the company in the subsequent year(s). The credit can be adjusted in the year in which the liability of the company as per the normal provisions is more than the MAT liability. The set off in respect of brought forward MAT credit shall be allowed in the subsequent year(s) to the extent of the difference between the tax on its total income as per the normal provisions and as per the MAT provisions.

Illustration
The tax liability of Essem Energy Ltd. for the financial year 2014-15 under the normal provisions of the Income-tax Act is Rs. 18,40,000 and the liability as per the provisions of MAT is Rs. 18,00,000. It has brought forward MAT credit of Rs. 2,00,000. Can the company adjust the MAT credit? If, yes then how much and what will be the tax liability of the company after adjustment of MAT credit?
**
MAT credit can be adjusted in the year in which the liability of the company as per the normal provisions is more than the MAT liability. In this case the liability as per the normal provisions of the Income-tax Act is Rs. 18,40,000 and the liability as per the provisions of MAT is Rs. 18,00,000. Liability as per the normal provisions is more than liability as per the provisions of MAT and, hence, the company can adjust the MAT credit.

The set off in respect of brought forward MAT credit shall be allowed in the subsequent year(s) to the extent of the difference between the tax on total income as per the normal provisions and liability as per the MAT provisions. Thus, after set off of MAT credit, the liability of the company cannot be less than liability as per the provisions of MAT. In this case, the liability as per MAT is Rs. 18,00,000, and, hence, after claiming set off of the MAT credit, the liability of company cannot be less than Rs. 18,00,000. Hence, out of the credit of Rs. 2,00,000 the company can claim credit of Rs. 40,000 only and the balance credit of Rs. 1,60,000 can be carried forward to next year(s).

Period for which MAT credit can be carried forward
As discussed earlier, the company can carry forward the MAT credit for adjustment in subsequent year(s), however, the MAT credit can be carried forward only for a period of 10 years after which it will lapse. In other words, if MAT credit cannot be utilised by the company within a period of 10 years (immediately succeeding the assessment year in which such credit was generated), then such credit will lapse. No interest is paid to the taxpayer in respect of such credit.

Report from chartered accountant
Every company to whom the provisions of section 115JB applies is required to obtain a report from a chartered accountant in Form No. 29B certifying that the book profit has been computed in accordance with the provisions of section 115JB. The report should be obtained on or before due date of filing the return of income.Audit report in Form No. 29B shall be filed electronically.

Provisions relating to AMT
The provisions of MAT are applicable to a corporate taxpayer only. The provisions relating to AMT are applicable to non-corporate taxpayers in a modified pattern in the form of Alternate Minimum Tax, i.e., AMT. Thus, it can be said that MAT applies to companies and AMT applies to a person other than a company. The provisions relating to AMT are given in sections 115JC to 115JF.

Basic provisions relating to applicability of the AMT to different taxpayers
The provisions of AMT will apply to every non-corporate taxpayer who has claimed (i) deduction under section 80H to 80RRB (except 80P), (ii) deduction under section 35AD and (iii) deduction under section 10AA. Thus, the provisions of AMT are not applicable to a non- corporate taxpayer who has not claimed any deduction under above discussed sections. However, following points should be kept in mind in this regard.
  • The provisions of AMT shall apply to an individual or a Hindu undivided family or an association of persons or a body of individuals (whether incorporated or not) or an artificial juridical person only if the adjusted total income (discussed later) of such person exceeds Rs. 20,00,000.
  • The provisions of AMT shall apply to every other person (i.e., other than an individual or a HUF or an AOP/BOI or an artificial juridical person) irrespective of its income. For definition of a person refer to section 2(31).
Rate of AMT
In case of non-corporate taxpayer, AMT is levied @ 18.5% of adjusted total income (discussed later). Surcharge and cess as applicable will also be levied.

Meaning of adjusted total income
In case of a non-corporate taxpayer, adjusted total income is computed in following manner :


Tax liability in case of a non-corporate taxpayers to whom the provisions of AMT apply
As per the concept of AMT, the tax liability of a non-corporate taxpayer will be higher of the following:
  • Tax liability computed as per the normal provisions of the Income-tax Law, i.e., tax computed on the taxable income of the taxpayer at the tax rate applicable to him. Tax computed in above manner can be termed as normal tax liability.
  • Tax computed @ 18.5% (plus surcharge and cess as applicable) on adjusted total income. The tax computed by applying 18.5% (plus surcharge and cess as applicable) on adjusted total income is called AMT.
Illustration
The taxable income for the year 2014-15 of Mr.Kumar (resident and age 39 years) computed as per the provisions of Income-tax Act is Rs. 28,40,000. The taxable income has been computed after deduction of Rs. 2,00,000 under section 80QQB in respect of royalty on books. Will he be liable to AMT? What will be his tax liability for the year?
**
The provisions of AMT shall apply to a non-corporate taxpayer if he has made any claim for deduction under section 80H to 80RRB (except section 80P), under section 35AD and under section 10AA. Further, the provisions of AMT shall apply to an individual or a Hindu undivided family or an association of persons or a body of individuals (whether incorporated or not) or an artificial juridical person only if the adjusted total income of such person exceeds Rs. 20,00,000. In this case, Mr. Kumar has claimed deduction under section 80QQB and his adjusted total income exceeds Rs. 20,00,000 and, hence, the provisions of AMT will apply to him.

By applying the provisions of AMT, the tax liability of Mr. Kumar will be higher of the following:
  • Tax liability computed as per the normal provisions of the Income-tax Law, i.e., tax computed on the taxable income of the taxpayer by applying the tax rate applicable to him. Tax computed in above manner can be termed as normal tax liability.
  • Tax computed @ 18.5% (plus surcharge and cess as applicable) on adjusted total income. The tax computed by applying 18.5% (plus surcharge and cess as applicable) on adjusted total income is called AMT.
His taxable income is Rs. 28,40,000, tax on Rs. 28,40,000 by applying the tax rates applicable to an individual below the age of 60 years for the assessment year 2015-16 works out to Rs. 6,77,000. Tax liability after cess of 2% and 1% would work out to Rs. 6,97,310.

Adjusted total income will come to Rs. 30,40,000 (Rs. 28,40,000 + Rs. 2,00,000, i.e., deduction under section 80QQB). AMT @ 18.5% on Rs. 30,40,000 will come to Rs. 5,62,400. AMT liability after cess of 2% and 1% will come to Rs. 5,79,272.

From the above computation it can be observed that the liability as per the normal provisions of the Income-tax Act is more than the liability as per the provisions of AMT and, hence, the tax liability of Mr. Kumar will be Rs. 6,97,310.

Illustration
The taxable income for the financial year 2014-15 of Mr. Ajay (resident and age 34 years) computed as per the provisions of Income-tax Act is Rs. 20,84,000. The taxable income has been computed after deduction of Rs. 5,00,000 under section 80JJA. Will he be liable to AMT? What will be his tax liability for the year?
**
The provisions of AMT shall apply to a non-corporate taxpayer if he has made any claim for deduction under section 80H to 80RRB (except section 80P), under section 35AD and under section 10AA. Further, the provisions of AMT shall apply to an individual or a Hindu undivided family or an association of persons or a body of individuals (whether incorporated or not) or an artificial juridical person only if the adjusted total income of such person exceeds Rs. 20,00,000. In this case, Mr. Ajay has claimed deduction under section 80JJA and his adjusted total income exceeds Rs. 20,00,000 and, hence, the provisions of AMT would apply to him.

By applying the provisions of AMT, the tax liability of Mr. Ajay will be higher of the following:
  • Tax liability computed as per the normal provisions of the Income-tax Law, i.e., tax computed on the taxable income of the taxpayer by the tax rate applicable to him. Tax computed in above manner can be termed as normal tax liability.
  • Tax computed @ 18.5% (plus surcharge and cess as applicable) on adjusted total income. The tax computed by applying 18.5% (plus surcharge and cess as applicable) on adjusted total income is called AMT.
His taxable income is Rs. 20,84,000, tax on Rs. 20,84,000 by applying the tax rates applicable to an individual below the age of 60 years for the assessment year 2015-16 works out to Rs. 4,50,200. Tax liability after cess of 2% and 1% would work outto Rs. 4,63,706.

Adjusted total income will come to Rs. 25,84,000 (Rs. 20,84,000 + Rs. 5,00,000, i.e., deduction under section 80JJA). AMT @ 18.5% on Rs. 25,84,000 will come to Rs. 4,78,040. AMT liability after cess of 3% will come to Rs. 4,92,381.

From the above computation it can be observed that the liability as per the provisions of AMT is more than the liability as per the normal provisions and, hence, the tax liability of Mr. Ajay would work out to Rs. 4,92,381 (i.e., as per AMT). The excess tax paid by Mr. Ajay on account of AMT can be claimed as AMT credit and can be carried forward for adjustment to next year(s) [provisions relating to AMT credit are discussed later].

AMT credit
As discussed in earlier part, a non-corporate taxpayer has to pay higher of normal tax liability or liability as per the provisions of AMT. If in any year the taxpayer pays liability as per AMT, then he is entitled to claim credit in the subsequent year(s) of AMT paid above the normal tax liability.

Illustration
The tax liability of Essem Enterprises (a partnership firm) for the financial year 2014-15 under the normal provisions of the Income-tax Act is Rs. 8,40,000 and the liability as per the provisions of AMT is Rs. 10,00,000. Will it be entitled to claim any AMT credit in the subsequent year(s)?
**
A non-corporate taxpayer paying AMT is entitled to claim the credit of AMT paid in excess of normal tax liability. In this case the liability of Essem Enterprises for the year 2014-15 under the normal provisions is Rs. 8,40,000 and as per the provisions of AMT is Rs. 10,00,000 (which is higher than normal tax liability) and, hence, the firm has to pay Rs. 10,00,000, i.e., liability as per AMT provisions.

If in any year, the taxpayer pays liability as per AMT, then it can claim AMT credit of the excess of AMT paid over the normal tax liability. In this case, the liability of AMT is higher, hence, the firm will be entitled to claim AMT credit of Rs. 1,60,000 (being excess of AMT over normal tax liability of Rs. 8,40,000).

Adjustment of carried forward AMT credit
As discussed earlier, a non-corporate taxpayer is entitled to claim AMT credit of excess AMT paid over the normal tax liability. The credit of AMT can be utilised by the taxpayer in the subsequent year(s). The credit can be adjusted in the year in which the liability of the taxpayer as per the normal provisions is more than the AMT liability. The set off in respect brought forward AMT credit shall be allowed in the subsequent year(s) to the extent of the difference between the tax on his total income as per the normal provisions of and the as per the AMT provisions.

Illustration
The tax liability of Essem Enterprises (a partnership firm) for the financial year 2014-15 under the normal provisions of the Income-tax Act is Rs. 18,40,000 and the liability as per the provisions of AMT is Rs. 18,00,000. It has brought forward AMT credit of Rs. 2,00,000. Can the firm adjust the AMT credit? If yes, then how much and what will be the tax liability of the firm after adjustment of AMT credit?
**
The AMT credit can be adjusted in the year in which the liability of the non-corporate taxpayer as per the normal provisions is more than the AMT liability. In this case, the liability as per the normal provisions of the Income-tax Act is Rs. 18,40,000 and the liability as per the provisions of AMT is Rs. 18,00,000. Liability as per the normal provisions is more than liability as per the provisions of AMT and, hence, the firm can adjust the AMT credit.

The set off in respect of brought forward AMT credit shall be allowed in the subsequent year(s) to the extent of the difference between the tax on his total income as per the normal provisions and the liability as per the AMT provisions. Thus, after set off of the AMT credit, the liability of the firm cannot be less than liability as per the provisions of AMT. In this case, the liability as per AMT is Rs. 18,00,000, and, hence, after claiming set off of the AMT credit, the liability of the firm cannot be less than Rs. 18,00,000. Hence, out of the credit of Rs. 2,00,000 the firm can claim credit of Rs. 40,000 only and the balance credit of Rs. 1,60,000 can be carried forward to next year(s).

Period for which AMT credit can be carried forward
As discussed earlier, a non-corporate taxpayer can carry forward the AMT credit for adjustment in subsequent year(s), however, the AMT credit can be carried forward only for a period of 10 years after which it will lapse. In other words, if AMT credit cannot be utilised by the non-corporate taxpayer within a period of 10 years (immediately succeeding the assessment year in which such credit was generated), then such credit will lapse. No interest is paid to the taxpayer in respect of such credit.

Report from Chartered Accountant
Every non-corporate taxpayer to whom the provisions of AMT apply is required to obtain a report from a chartered accountant in Form No. 29C on or before the due date of filing the return of income.

MCQ on AMT and MAT

Q1.MAT stands for  
(a) Minimum Alternate Tax  
(b) Minimum Allowed Tax
(c) Minimum Applicable Tax 
 (d) Minimum Adjustable Tax
Correct answer : (a) 
Justification of correct answer :
MAT stands for Minimum Alternate Tax and AMT stands for Alternate Minimum Tax. Initially the concept of MAT was introduced for companies and progressively it has been made applicable to all other taxpayers in the form of AMT. Thus, option (a) is the correct option.

Q2.AMT stands for  
(a) Applicable Minimum Tax  
(b) Adjustable Minimum Tax
(c) Alternate Minimum Tax 
(d) Allowed Minimum Tax
Correct answer : (c) 
Justification of correct answer :
MAT stands for Minimum Alternate Tax and AMT stands for Alternate Minimum Tax. Initially the concept of MAT was introduced for companies and progressively it has been made applicable to all other taxpayers in the form of AMT. Thus, option (c) is the correct option.

Q3. As per section 115JB, every taxpayer being a company is liable to pay MAT, if the Income- tax payable on the total income, computed as per the provisions of the Income-tax Act in respect of any year is less than 15.50% of its book-profit + surcharge (SC) + education cess (EC) + secondary and higher education cess (SHEC).
(a) True 
(b) False
Correct answer : (b) 
Justification of correct answer :
As per section 115JB, every taxpayer being a company is liable to pay MAT, if the Income-tax payable on the total income, computed as per the provisions of the Income-tax Act in respect of any year is less than 18.50% of its book-profit + surcharge (SC) + education cess (EC) + secondary and higher education cess (SHEC). Thus, the statement given in the question is false and hence, option (b) is the correct option.

Q4. As per section 115JB(5A) MAT shall not apply to any income accruing or arising to a company from life insurance business referred to in section 115B.
(a) True  
(b) False
Correct answer : (a) 
Justification of correct answer :
As per section 115JB(5A) MAT shall not apply to any income accruing or arising to a company from life insurance business referred to in section 115B.Thus, the statement given in the question is true and hence, option (a) is the correct option.

Q5. The provisions of MAT will apply to shipping income liable to tonnage taxation, i.e.,tonnage taxation scheme as provided in section 115V to 115VZC.
(a) True 
(b) False
Correct answer : (b) 
Justification of correct answer :
The provisions of MAT will not apply to shipping income liable to tonnage taxation,  i.e.,tonnage taxation scheme as provided in section 115V to 115VZC.Thus, the statement given in the question is false and hence, option (b) is the correct option.

Q6. As per Explanation 1 to section 115JB(2) "book profit" for the purposes of section 115JB means net profit as shown in the P & L Account prepared in accordance with of the Companies Act as increased and decreased by certain items prescribed in this regard.
(a) Schedule V  
(b) Schedule VI
(c) Schedule IV  
(d) Schedule I
Correct answer : (b) 
Justification of correct answer :
As per Explanation 1 to section 115JB(2) "book profit" for the purposes of section 115JB means net profit as shown in the P & L Account prepared in accordance with Schedule VI of the Companies Act [Now Schedule III to the Companies Act, 2013] as increased and decreased by certain items prescribed in this regard. Thus, option (b) is the correct option.

Q7. If in any year the company pays liability as per MAT, then it is entitled to claim credit of MAT paid over and above the normal tax liability in the subsequent year(s).
(a) True 
 (b) False
Correct answer : (a) 
Justification of correct answer :
If in any year the company pays liability as per MAT, then it is entitled to claim credit of MAT paid over and above the normal tax liability in the subsequent year(s). The provisions relating to carry forward and adjustment of MAT credit are given in section 115JAA.
Thus, the statement given in the question is true and hence, option (a) is the correct option. 

Q8. In case of non-corporate taxpayer, AMT is levied @ % of adjusted total income. 
(a) 20.00  
(b) 18.50
(c) 15.00 
(d) 10.00
Correct answer : (b) 
Justification of correct answer :
In case of non-corporate taxpayer, AMT is levied @ 18.5% of adjusted total income Thus, option (b) is the correct option.

Q9.Every non-corporate taxpayer to whom the provisions of AMT apply is required to obtain a report from a chartered accountant in Form No.on or before the due date of filing the return of income.
(a) 29 
(b) 29A
(c) 29B 
(d) 29C
Correct answer : (d)
Justification of correct answer :
Every non-corporate taxpayer to whom the provisions of AMT apply is required to obtain a report from a chartered accountant in Form No. 29C on or before the due date of filing the return of income Thus, option (d) is the correct option.

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