Govt may rationalise MAT in Budget 2017

Budget 2017 could see a reduction in minimum alternate tax (MAT) rates, which have gone up in the past few years. The rate could be reduced by a few percentage points. 

SEZ developers and units, however, will not be receiving any concessions related to MAT. Along with the increase in MAT rates over the years, its ambit has also been expanded — with special economic zone (SEZ) developers and SEZ units being bought under MAT's ambit from the financial year 2011-12 onwards.

A high MAT rate, which stands at 18.5 per cent, has a negative impact on the cash flow of companies which have faced losses or have low taxable income. In fact, such a high rate also weakens the tax incentives available to businesses otherwise.  

The other point under consideration has been the period for which MAT credit is allowed to be carried forward and set-off against normal credit, reported The Times of India.