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Alternate Minimum Tax (AMT) on Assesses other Company

Applicability

Alternate minimum tax under this section is applicable on all assesses other than company. Also this section doesn’t apply to assesses whose adjusted total income doesn’t exceeds Rs. 20 lakhs.

Conditions for payment of Alternate Minimum Tax

Where regular income tax payable by an assesse is less than the alternate minimum tax then the assessee has to pay the alternate minimum tax for such year. In other words the assessee has to pay the regular income tax or alternate minimum tax, whichever is higher.

Regular income tax is the tax calculated on total income of the assessee without considering the provisions of this section.

Alternate minimum tax is calculated as 18.5%  of the adjusted total income. Additionally  education cess and higher education cess of 3% is payable.

Adjusted total income shall be the total income before giving effect to this Chapter as increased by—

 (i)  deductions claimed, if any, under any section (other than section 80P) included in Chapter VI-A under the heading “C.—Deductions in respect of certain incomes

(ii)  deduction claimed, if any, under section 10AA

(iii) deduction claimed, if any, under section 35AD as reduced by the amount of depreciation allowable in accordance with the provisions of section 32 as if no deduction under section 35AD was allowed in respect of the assets on which the deduction under that section is claimed.

Tax Credit for Alternate Minimum Tax

Tax credit will be allowed for the excess of alternate minimum tax paid over the regular income tax payable. In any subsequent year in which the regular income tax exceeds the alternate minimum tax the tax credit shall be allowed to be set off to the extent of the excess of regular income-tax over the alternate minimum tax and the balance of the tax credit, if any, shall be carried forward.

Such tax credit can be carry forward for next ten years from the year in which excess tax is paid. No interest shall be payable on tax credit allowed, in other words no interest under section 234A, 234B or 234C is levied for the amount allowed as tax credit, just like TDS.

Certificate from Chartered Accountant

Every person to whom this section applies shall obtain a report in form 29C certifying that the adjusted total income and the alternate minimum tax have been computed in accordance with the provisions of this Chapter. (Rule 40BA)

ICAI guidance note on issuing form 29C

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