Firms opting for lower tax regime can't adjust accumulated credits on MAT

The ordinance to cut the corporation tax rate has said MAT provisions will not apply to a company which has exercised the option for a lower rate of tax

Accumulated credits on minimum alternate tax (MAT) cannot be adjusted against their tax liabilities by companies opting for the newly announced lower corporation tax regime, said a source in the Central Board of Direct Taxes. 

Officials added the board would soon issue a circular on such clarifications in the newly announced tax regime, including those on MAT credit. MAT is currently levied at 18.5 per cent; after surcharges and cess, this is 21-22 per cent. The new structure has reduced the rate of MAT to 15 per cent, adding to a little over 17 per cent after cess and surcharges.