CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Corporate Tax Planning
Under section 206 of the Income-tax Act, 2025 (as amended by the Finance Act, 2026), the minimum alternate tax on book profit of an ordinary domestic company, other than an IFSC unit earning solely in convertible foreign exchange, is levied at which rate?
The rate is 14%. Section 206(1)(b)(ii) fixes MAT at 14% of book profit for companies other than IFSC units earning solely in convertible foreign exchange, replacing the earlier 15% from 1 April 2026. The 9% rate is only for such IFSC units.
- A9%
- B14%Correct
- C15%
- D18.5%
Explanation
Section 206(1)(b)(ii) prescribes 14% on book profit for any company other than an IFSC unit earning solely in convertible foreign exchange. The earlier 15% was substituted by 14% from 1-4-2026. 18.5% is the alternate minimum tax rate for non-company persons, and 9% applies only to IFSC units.
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