Full Form of MAT
Minimum Alternate Tax
MAT Full Form is Minimum Alternate Tax. The concept of MAT was first introduced under IT act 1961 in order to charge tax to the ‘zero tax’ companies in India. In other words, MAT makes companies pay minimum tax. It applies to all companies except the companies that are engaged in power sectors and infrastructure. The companies which make huge profits but are not paying corporate tax have to pay certain percentage of the profit as Minimum Alternate Tax.
Income that come from charitable activities, free trade zones, and investments made by the venture capital companies are all excluded from MAT. Nevertheless, companies that belong to other countries but have source of income from India are also liable to pay MAT. MAT can be adjusted or carried forward under certain conditions but is payable with the 5 years given period.