A covered domestic company has ordinary taxable income of ₹8,40,000 at a 25% rate and book profit of ₹18,40,000 for tax year 2026–27. It is subject to ordinary MAT, and no MAT credit, surcharge or…
Question and options
A covered domestic company has ordinary taxable income of ₹8,40,000 at a 25% rate and book profit of ₹18,40,000 for tax year 2026–27. It is subject to ordinary MAT, and no MAT credit, surcharge or cess applies. How much income-tax is payable?
₹2,76,000
₹8,40,000
₹2,10,000
₹2,57,600
Answer and explanation
Correct answer: D - ₹2,57,600
Under section 206(1) of the Income-tax Act, 2025, as amended by the Finance Act, 2026, a company pays minimum alternate tax at 14% of book profit when its normal tax is lower: 14% of ₹18,40,000 is ₹2,57,600, which exceeds normal tax of ₹2,10,000. ₹2,76,000 uses the former 15% rate.
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