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News INCOME TAX

  • Oct 04, 2019
  • MAT credit not available to companies opting for lower corporate tax rate

    Companies looking to switch to the just-lowered 22% corporate tax rate without exemptions, will not be able use accumulated credit of minimum alternate tax. The Central Board of Direct Taxes (CBDT) has issued a detailed circular that MAT credit will not be available to a company that opts for lower corporate tax rate of 22%. However, companies will have the option to go for the new regime after completely utilising MAT credit. ET on Monday reported about CBDT clarifying that MAT credit will not be allowed. “...Tax credit of MAT paid by the domestic company exercising the option under Section 115BAA of the Act shall not be available consequent to exercising of such option,” said Wednesday’s circular. Brought forward loss on account of additional depreciation shall also not be available to companies. Finance minister Nirmala Sitharaman had on September 20 slashed the corporate tax rate to 22% without exemptions or incentives from current 30% offering a Rs.1.45 lakh crore boost to the economy, which grew by its slowest pace in six years in April-June, 2019-20 at 5%.