MAT

    MAT – The need for MAT arose because of differences in the profits computed under the Income Tax Act and the Companies Act. Income Tax laws provide several exemptions and deductions from book profit, which are not provided by the Companies Act due to which the profits under both laws vary. Further the IT laws also provide different rates of depreciation, as compared with the Companies Act. As a result, many companies have a zero tax liability, though they report profit under the Companies Act.