Companies paying the minimum alternate tax (MAT) will be allowed to credit it against corporate tax that can be carried forward for 10 years. A finance ministry official said the rules would uniformly apply to all sectors as was the existing law. He, however, said rates would be defined later in the Bill on DTC.
DTC proposed that the applicability of MAT would not be linked to book profits, but would be two per cent of the gross value of assets, with no eligibility to carry forward the tax credit. It was proposed to be paid even during loss-making years, with no set-off against future profits.
The discussion paper on Tuesday suggested reverting to the existing practice where MAT was levied on book profits. Presently, MAT is levied at the rate of 19.93 per cent on book profits.
