The Alternative Minimum Tax (AMT) is a separate tax calculation that is designed to ensure that high-income taxpayers pay at least a minimum amount of tax. It is calculated using a different set of rules than the regular income tax and typically results in a higher tax liability. The AMT is intended to prevent wealthy taxpayers from using deductions and tax breaks to reduce their tax liability to zero. It is a tax that is imposed on an individual or a corporation that has exemptions or special circumstances allowing for lower payments of the tax. These exemptions are added back in to the individual's or corporation's income for the purpose of calculating the AMT.
Alternate Minimum Tax In India?
The Alternative Minimum Tax (AMT) in India is a special tax that prevents non-corporate people with high incomes from abusing deductions and liable to pay little or no income tax. It is payable by an individual or any other taxpayer, other than a company to ensure that the taxpayer claiming various tax incentives pays a minimum amount of tax. AMT is levied at 18.5% (plus cess and surcharge) on the adjusted total income arrived after removing the claim for tax deductions and exemptions. AMT came into force in 2011.
In India AMT includes Individual, Hindu Undivided Family (HUF), an Association of Persons (AOP), a Body of Individuals (BOI) (whether incorporated or not), an artificial juridical person, Limited Liability Partnership firm (LLP), partnership firm etc. However, The provisions of AMT do not apply to foreign companies.
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Taxation