GS PrelimsEconomyTaxation1997

The Minimum Alternative Tax (MAT) was introduced in the Budget of the Government of India for the year

1991-92

1992-93

1995-96

1996-97

Correct Answer: Option D

Explanation

1. The Minimum Alternative Tax (MAT) was introduced to bring 'zero tax companies' (companies showing book profits but paying no corporate income tax due to various exemptions/deductions) under the tax net. 2. MAT was first introduced in India by the Finance Act, 1987 (relevant for Assessment Year 1988-89) but was later withdrawn. 3. It was reintroduced in a modified form by the Finance Act, 1996, applicable from the Assessment Year 1997-98. This corresponds to the Union Budget presented for the financial year 1996-97.

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