21.1 Minimum Alternate Tax (MAT) is payable by companies and Alternate Minimum Tax (AMT) is payable persons other than companies. Tax payable under ITA is higher of the following:
i) Tax under Normal provisions of the ITA; or
ii) Tax as per MAT/AMT provisions.
In a case where tax payable is as per MAT/AMT provisions, then the excess MAT/AMT paid over tax as per normal provisions, is available as credit in subsequent years. In subsequent years, if tax payable under normal provisions is higher than MAT/AMT, the excess MAT / AMT of earlier years can be set off against normal tax. (Please refer to our budget note for 2012 for a detailed example.)
21.2 As per the current provisions, MAT/AMT credit can be carried forward up to 10 years. Finance Bill provides for increasing this time limit to 15 years.