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MAT vs AMT: Income Tax (No. 2) Bill 2025 Separates the Two

12 August 20251 min read
ECONOMYMAT vs AMT:Income Tax (No. 2)Bill 2025Separates the Two12 August 2025safalsetu.com

Why in the news

With the Lok Sabha passing the Income Tax (No. 2) Bill, 2025, the two minimum-tax regimes now stand apart.

MAT compared with AMT

PointMATAMT
Full formMinimum Alternate TaxAlternate Minimum Tax
PayersCompanies, domestic and foreignLLPs, partnerships, individuals, HUFs
TriggerLow taxable income after exemptionsSpecified deductions such as 10AA or Chapter VI-A
RateAbout 15% of book profitsAbout 18.5% of adjusted total income

Key facts

  • Purpose: make sure incentive-heavy taxpayers still pay a base level of tax.
  • New relief: capital-gains-only LLPs without specified deductions escape AMT.
  • This ends the earlier ambiguity that caught investment-holding LLPs.

Exam angle

  • MAT: companies; AMT: non-corporates.

Test yourself

1. Which taxpayers are covered by Minimum Alternate Tax (MAT) under the Income Tax (No. 2) Bill, 2025?

MAT is now applicable only to companies, including foreign ones.

2. Approximately what rate of AMT applies to non-corporate taxpayers, as per the notes?

AMT is around 18.5% plus surcharge and cess.

3. Which LLPs are newly exempt from Alternate Minimum Tax?

Capital-gains-only LLPs without specified deductions are exempt from AMT.

This topic is part of Daily Current Affairs 12 August 2025 (15 topics).

All topics of the dayDay quizAugust 2025

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