MAT Credit Calculator

Minimum Alternate Tax (MAT) makes a company with book profits but low or zero taxable income (because of deductions, exemptions or incentives) still pay a minimum tax. It is charged on book profit, and the company pays the higher of MAT or its normal tax. MAT is 15% of book profit up to FY 2025-26 and 14% from tax year 2026-27, plus surcharge and cess in both cases.

Even if your taxable income is nil after the Section 80-IAC deduction, you still pay MAT on your book profit. There is no MAT holiday for startups.

You may read that startups are exempt from MAT for their first five years under Section 115JB(6). That is not correct. Sub-section (6) was an exemption for SEZ developers and units, and it stopped applying from 1 April 2012. A DPIIT-recognised startup claiming 80-IAC still pays MAT on its book profit.

The only way a company avoids MAT altogether is by opting for the 22% regime (Section 115BAA) — and that regime gives up the 80-IAC deduction. Compare both with your CA before choosing.

The Finance Act 2026 changed MAT credit. From tax year 2026-27, MAT paid under the old regime is a final tax: it creates no new credit. Credit already built up by 31 March 2026 still exists, but with new limits:

Credit up to FY 2025-26

The excess of MAT over normal tax in those years, as before.

Where you can use it

Only if the company moves to the new (concessional) regime from tax year 2026-27.

How much per year

Up to 25% of the tax payable on total income in that year; the rest carries forward.

Expiry

Within 15 years of the year in which the credit first arose.

MAT = 14% × Book profit, plus surcharge (with marginal relief) and 4% cess

Tax payable = max(MAT, Normal tax liability)

Compare like with like: your normal tax figure includes surcharge and cess, so the calculator adds the same to MAT before comparing.

• If you rely on deductions like 80-IAC, budget for MAT on book profit in those years — the deduction does not remove it.
• If you have MAT credit from earlier years, the only way to use it from tax year 2026-27 is to move to the new regime.
• Book profit and taxable profit can differ a lot (depreciation, provisions). Have your CA compute book profit before relying on the estimate.

From tax year 2026-27 (income earned from 1 April 2026) the Income-tax Act 2025 replaces the 1961 Act. This page uses the 1961 section numbers, which still apply to FY 2025-26 and earlier years. For the current year, the same rules sit under these new numbers:

• Section 80-IAC → section 140 of the Income-tax Act 2025
• Section 115BAA → section 200 of the Income-tax Act 2025
• Section 115JB (MAT) → section 206 of the Income-tax Act 2025