How long can I carry forward MAT credit?

MAT credit can be carried forward for up to 15 assessment years from the year it arose. It can be set off only in years where your normal tax exceeds MAT.

Are startups exempt from MAT?

Yes — DPIIT-recognised startups get a MAT holiday for their first 5 years from incorporation under Section 115JB(6). Companies opting for the 22% Section 115BAA regime are also permanently exempt from MAT.

How is MAT credit calculated in this tool?

MAT is computed as 15% of your book profit, and you pay the higher of MAT or your normal tax. When MAT is higher, the excess of MAT over your normal tax becomes your MAT credit. For example, on ₹5 Cr book profit, MAT of ₹75L against a normal tax of ₹10L generates ₹65L of carry-forward credit.

Can MAT apply even if my company made a loss this year?

It can. MAT is charged on book profit as adjusted under Section 115JB, not on your taxable income, so a company with a positive book profit can owe MAT even when its income-tax computation shows little or no liability. The calculator flags this when your normal tax is nil but book profit is positive.

Should a profitable startup take the MAT holiday or opt for Section 115BAA?

Both remove MAT, but they work differently. The 115JB(6) startup holiday only covers the first 5 years and generates no MAT credit during that time, while opting into the 22% Section 115BAA regime removes MAT permanently but locks you out of certain deductions. Compare your overall tax under each before choosing — it depends on your profit profile and which incentives you rely on.

Why is no MAT credit generated during the startup MAT holiday?

MAT credit is the excess of MAT actually paid over normal tax. During the holiday you pay no MAT at all, so there is nothing in excess of normal tax to carry forward. The calculator highlights this so you do not plan around a credit balance that will not exist when the holiday ends.

When can I actually use my accumulated MAT credit?

Only in a future year where your normal tax exceeds MAT, and only up to that difference — you cannot set off more than the gap between normal tax and MAT in any one year. Any credit not used within 15 assessment years simply lapses, so map out your expected profit years to avoid losing it.

MAT Credit Calculator

Check whether MAT applies to your company, how much MAT credit you generate, and whether the startup MAT holiday or 115BAA exemption applies to you.

Book profit as per companies Act

₹

Net profit as per your profit & loss account, adjusted per Section 115JB.

₹5 crores

Normal tax liability (under chosen regime)

₹

Total income tax payable under normal provisions (base + surcharge + cess).

₹1 crore

Tax regime

Companies under Section 115BAA (22%) are exempt from MAT.

Startup MAT holiday applicable?

Startups incorporated after 1 April 2016 get a MAT holiday for the first 5 years under Section 115JB(6).

Tax payable (higher of MAT or normal)

₹1,00,00,000

Normal tax is higher — no MAT triggered.

MAT liability (15% of book profit)₹75,00,000

Normal tax liability₹1,00,00,000

15% of book profit as adjusted under Section 115JB.

Estimates only — not financial, tax or legal advice. Figures vary by state, capital and individual circumstances.

How to use this calculator

Enter your book profit and normal tax liability to see if MAT applies, and how much MAT credit you can carry forward.

1
Enter your book profit. Net profit as per your companies Act P&L, adjusted per Section 115JB.
2
Enter your normal tax liability. The total tax you'd pay under your chosen regime (base + surcharge + cess).
3
Select your regime. Companies under Section 115BAA (22% new regime) are exempt from MAT entirely.
4
Check startup MAT holiday. Startups are exempt from MAT for their first 5 years under Section 115JB(6).

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What is MAT?

Minimum Alternate Tax (MAT) under Section 115JB ensures that a company with book profits but low or zero taxable income (due to deductions, exemptions, or incentives) still pays a minimum tax to the government. MAT is 15% of the company's book profit, and the company pays the higher of MAT or its normal tax liability.

MAT is designed to prevent zero-tax companies. Even if your taxable income is nil after deductions under Section 80-IAC or other provisions, you may still need to pay MAT if 15% of your book profit exceeds your normal tax.

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How MAT credit works

If you pay MAT because it exceeds your normal tax, the excess amount becomes MAT credit. This credit is carried forward and can be set off against future tax years when your normal tax exceeds MAT — effectively, you get the credit back in a later year.

Credit amount: MAT paid minus normal tax liability for that year. Only the excess over normal tax qualifies as credit.
Carry-forward period: MAT credit can be carried forward for up to 15 assessment years from the year in which it arose.
Set-off rules: MAT credit can be set off in a year where normal tax exceeds MAT — but only to the extent of the difference. You cannot set off more than the excess of normal tax over MAT in any given year.
Credit expiry: Unused MAT credit expires after 15 years. Plan your tax position to utilise credit before it lapses.

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Startup MAT holiday

Section 115JB(6) provides a MAT holiday for eligible startups: MAT does not apply for the first 5 years from incorporation. To qualify:

The company must be a DPIIT-recognised startup.
Incorporated on or after 1 April 2016.
The holiday applies to the first 5 consecutive years from the year of incorporation.
You must not opt for Section 115BAA (the 22% new regime) — companies under 115BAA are exempt from MAT anyway.

If you're within the first 5 years, you pay only your normal tax — no MAT. But no MAT credit is generated during the holiday period. Once the holiday ends, MAT applies normally if 15% of book profit exceeds your tax liability.

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How MAT is computed

MAT = 15% × Book profit (adjusted per Section 115JB)

Tax payable = max(MAT, Normal tax liability)

MAT credit = Tax payable − Normal tax (credit carry-forward up to 15 years)

A company with book profit ₹5 Cr and normal tax ₹10L:

Book profit: ₹5,00,00,000
Normal tax: ₹10,00,000
MAT (15% of book profit): ₹75,00,000

MAT of ₹75L exceeds normal tax of ₹10L. Pay MAT = ₹75L. MAT credit = ₹75L − ₹10L = ₹65L, available for set-off in the next 15 years.

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