Consider the following statements about Minimum Alternate Tax MAT and Alternative Minimum Tax AMT 1 ...........

Economic Affairs Tax System

Consider the following statements about Minimum Alternate Tax (MAT) and Alternative Minimum Tax (AMT).

1. MAT and AMT are applicable in cases of payment of no tax by the assessee, in spite of earning substantial profit, because of various exemptions provided under Income Tax Law.

2. MAT is levied on Companies while AMT is levied on Limited Liability Partnerships.

Which of the above given statements is/are true?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

छोटे Courses बड़े Results

Master Tax System

Prepare through Micro-courses

Try Now

Explanation:

Both the statements are correct.
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
As per the current tax provision of the income tax act 1961, Minimum Alternate tax (MAT) is levied only on companies and Alternate Minimum Tax (AMT) on limited liability partnerships (LLPs).