Article on Alternate Minimum Tax – Section 115JC

1. Applicability

All assesses except companies are liable to pay AMT if the tax payable under the normal provisions of income tax is lesser than AMT.

In simple words,

• Tax payable under income tax < AMT

However AMT is not payable by:-

• Individual
• HUF
• AOP/BOI
• Artificial Juridical person

If the ADJUSTED TOTAL INCOME* OF SUCH PERSON DOES NOT EXCEED ₹ 20,00,000/-

2. Rate of AMT

18.5% of Adjusted total income* (as increased by surcharge, if applicable)

*ADJUSTED TOTAL INCOME

 3. TAX CREDIT

• If AMT > Income tax as per normal provisions of income tax act, then the excess amount shall be available as credit against future tax liability.
• The AMT Credit will be allowed to be carried forward and set off for a period of 10 years succeeding the year in which that credit is available.

• Credit will be allowed if Normal tax as per Income tax act > AMT.
• Max Credit restricted up to difference of Normal Income tax & AMT                                                                 i.e. Normal Income Tax – AMT

However, The MAT Credit of company is not allowed to carry forward in hands of LLP in case of conversion of company in LLP.

Key Points to Remember & for Clarification: –

• Other provisions like advance tax, interest u/s 234A/B/C shall apply to LLP which is liable to pay AMT

• Assessee will require to obtain a report from a CA certifying the computation of AMT & Adjusted total income, on or before the due date of filing of income tax return.

Author Chiranjivi Nagpal and can be reach out freely at [email protected] and on +91-9999761898.