Alternate Minimum Tax (AMT) - Section 115JC of Income Tax

Under the Income Tax Act, there is a concept of Minimum Alternate Tax for the corporate assessee according to which corporate assessee would require to pay minimum alternate tax subject to certain conditions. The concept of Alternate minimum tax was introduced to collect minimum tax from the assessee who claims certain profit-related deductions and is liable to pay negligible tax under the normal provision.

What is ALTERNATE MINIMUM TAX?

Considering the gist of Section 115JC, AMT is computed on Adjusted Total Income of a Non-Corporate Assessee (Non-Corporate Assessee includes INDIVIDUAL/HUF/AOP/BOI (whether Incorporated or not), Artificial Judicial Person).

Applicability of ALTERNATE MINIMUM TAX

AMT is applicable to Non-Corporate Assessee and such assessee should have claimed deduction under:

• Chapter VI heading C i.e 80H to 80RRB (except 80P) OR

• Under Section 10AA (Profit derived by SEZ units) OR

• Section 35AD (Deduction for expense on specified business)

Tax Under AMT is payable when:

"TAX PAYABLE AT NORMAL RATE < TAX PAYABLE AT AMT RATE"

Non-Applicability of ALTERNATE MINIMUM TAX

AMT is not Applicable to:

1. Corporate Assessee

2. Non-Corporate Assessee whose ADJUSTED TOTAL INCOME does not exceed Rs.20 lakhs

What is ADJUSTED TOTAL INCOME?

Calculation of Adjusted Total Income: