What is alternate minimum tax?
In one sentence
The minimum tax for persons other than companies that claim certain deductions, computed on income with those deductions added back.
An everyday analogy
Like MAT, but for partnerships, LLPs and individuals who claim specified deductions.
How it flows
A real example
An LLP fund manager in GIFT IFSC claiming the 100% deduction pays 9% of its adjusted total income, if higher than its regular tax.
Why it matters
It is why an LLP does not reach the nil tax a company can reach under section 200.
How it differs
MAT applies to companies; AMT applies to persons other than companies.
What the law says
Section 206(2)(b) to (d)
(b) For the purposes of this sub-section,— (i) “adjusted total income” shall be the total income before giving effect to clause (a), as increased by deductions claimed, if any, under— (I) any section (other than section 149) included in Chapter VIII-C; (II) section 46 as reduced by depreciation allowable as per the provisions of section 33, as if no deduction was allowed in respect of the assets on which the deduction under that section is claimed; (ii) “alternate minimum tax” means the amount of tax computed on adjusted total income,— (I) in case of an assessee being a unit located in an International Financial Services Centre and deriving its income solely in convertible foreign exchange, at the rate of 9%; (II) in case of an assessee being a co-operative society, at the rate of 15%; (III) in any other case, at a rate of 18.5%; (iii) “regular income-tax” means the income-tax payable for a tax year by a person on his total income in accordance with the provisions of this Act other than the provisions of this sub-section; (iv) “Unit” means a unit established in an International Financial Services Centre. (c) The provisions of this sub-section shall apply to a person who has claimed any deduction under any section (other than section 14992) included in Chapter VIII-C or section 46. (d) The provisions of this sub-section shall not apply to— (i) a person, who has exercised the option under section 203(5) or section 204(2); (ii) a person, whose income-tax payable in respect of the total income of such person is computed under section 202(1); (iii) an individual or a Hindu undivided family or an association of persons or a body of individuals, whether incorporated or not, or an artificial juridical person referred to in section 2(77)(g), if the adjusted total income of such person does not exceed twenty lakh rupees; or (iv) any specified fund referred to in Schedule VI (Note 1).
Income-tax Act, 2025 as amended by the Finance Act, 2026 · text as notified, amendment footnote numbers omitted · checked 24 October 2026 · Official text
Show answer
Yes, for the excess over regular tax, in later years.
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Meet the expert
CS Prashant Kumar
Company Secretary & Compliance Officer
Global Horizons Capital Advisors (IFSC) Private Limited — an IFSCA-licensed investment banker
Published in The Chartered Accountant (Jun 2025, Jan 2025, Mar 2024) and Chartered Secretary (Aug 2023)
Prashant Kumar is a seasoned Company Secretary and corporate governance strategist with more than 13 years of experience advising large corporates, promoter-led groups and global businesses on compliance, regulatory risk and board governance. In GIFT IFSC, the IFSCA regime is his day job rather than a research topic.