Northspread
Formula sheet/NISM Series XV: Research Analyst/Industry Analysis
[ INDUSTRY ANALYSIS ]

Corporate Tax Liability & Minimum Alternate Tax (MAT)

Base Corporate Tax=Taxable Profit×30%(or25%for turnover<Rs400Cr/22%under new regime)\text{Base Corporate Tax} = \text{Taxable Profit} \times 30\% (or 25\% \text{for turnover} < Rs 400 Cr / 22\% \text{under new regime})
MAT=15%×Book Profit+Surcharge+4%Health&Education CessMAT = 15\% \times \text{Book Profit} + Surcharge + 4\% Health \& \text{Education Cess}
Variables

MAT Credit = MAT Paid - Normal Tax Payable (can be carried forward to set off against future excess tax liabilities).

Worked example
Minimum Alternate Tax (MAT) vs. Normal Corporate Tax

Nirvaan Industrials Ltd reports a Book Profit (as per the Companies Act, before tax) of Rs 40 Crore for FY2026, but its Taxable Profit under the Income Tax Act — after claiming accelerated depreciation and other allowable deductions — is only Rs 18 Crore. The company is taxed under the 25% regime (turnover below Rs 400 Crore). Assume no surcharge is applicable. Compute the tax the company actually pays and any MAT credit generated.