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What is the story about?
In a key change to the Minimum Alternate Tax (MAT) regime, the Union Budget 2026 has proposed to make MAT a final tax from April 1, 2026, while also reducing the applicable rate.
As part of the Budget announcements, the finance minister stated that MAT will no longer allow carry-forward or utilisation of MAT credit from April 1, 2026. This means companies that pay MAT will not be able to set off such payments against future regular tax liabilities beyond this date.
Separately, the Budget proposed to reduce the MAT rate from 15% to 14% on book profits, providing some relief on the overall tax incidence for entities covered under the provision.
The announcement also indicated that Non-Resident Indians (NRIs) would be exempt from MAT, aligning their tax treatment with the broader changes in the regime.
The move marks a structural shift in how MAT operates, as it removes the long-standing credit mechanism that allowed firms to adjust MAT payments against future tax liabilities when their regular tax exceeded MAT in later years.
The changes are proposed to take effect from the assessment year beginning April 1, 2026, subject to legislative approval.
This is a developing news
Catch LIVE updates on Budget here
As part of the Budget announcements, the finance minister stated that MAT will no longer allow carry-forward or utilisation of MAT credit from April 1, 2026. This means companies that pay MAT will not be able to set off such payments against future regular tax liabilities beyond this date.
Separately, the Budget proposed to reduce the MAT rate from 15% to 14% on book profits, providing some relief on the overall tax incidence for entities covered under the provision.
The announcement also indicated that Non-Resident Indians (NRIs) would be exempt from MAT, aligning their tax treatment with the broader changes in the regime.
The move marks a structural shift in how MAT operates, as it removes the long-standing credit mechanism that allowed firms to adjust MAT payments against future tax liabilities when their regular tax exceeded MAT in later years.
The changes are proposed to take effect from the assessment year beginning April 1, 2026, subject to legislative approval.
This is a developing news
Catch LIVE updates on Budget here
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