The Statutory Brief

IT Act 1961 → 2025 / Section 115JB

Tax rates & regime

Section 115JB → Section 206

Minimum alternate tax (MAT) on book profits of companies

Section 115JB of the old Income-tax Act, 1961 · new section 206 under the Income-tax Act, 2025

New reference Section 206 (115JC AMT also 206)

Income-tax Act, 1961Section 115JB

  • MAT at 15% of book profit
  • 9% for IFSC units earning in convertible foreign exchange
  • MAT credit carried forward 15 years
  • Alternate minimum tax (115JC) for non-corporates

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 206 (115JC AMT also 206)

  • MAT and AMT combined in section 206
  • MAT rate 14% from 1 April 2026 (Finance Act 2026)
  • IFSC units 9%
  • Book profit adjustments listed in 206(1)(c)

Applies from tax year 2026-27 (from 1 April 2026).

What changed

A real change: the Finance Act 2026 cut the MAT rate from 15% to 14%, removed MAT credit for tax paid under section 206(1) from tax year 2026-27, and limited use of 115JAA credit brought forward at 31 March 2026 — 25% of tax payable for companies moving to section 200/201 (206(3)); foreign companies keep the old set-off method (206(4)).

Practice notes

  • Companies under section 200/201 (22%/15% regimes) are outside MAT.
  • MAT paid from tax year 2026-27 does not create a credit; plan the use of brought-forward credit carefully.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is the MAT rate under the new Income Tax Act 2025?

14% of book profit under section 206 (reduced from 15% by the Finance Act 2026); 9% for qualifying IFSC units.

Is MAT credit available under the new Income Tax Act?

Not for MAT paid from tax year 2026-27 (Finance Act 2026 omitted the credit clauses). Credit brought forward at 31 March 2026 can be used under section 206(3)–(4); companies switching to the 22%/15% regime can set it off only up to 25% of tax payable.

What is section 115JB called in the new Income-tax Act, 2025?

Section 115JB of the Income-tax Act, 1961 corresponds to Section 206 (115JC AMT also 206) of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 115JB under the new Income Tax Act?

A real change: the Finance Act 2026 cut the MAT rate from 15% to 14%, removed MAT credit for tax paid under section 206(1) from tax year 2026-27, and limited use of 115JAA credit brought forward at 31 March 2026 — 25% of tax payable for companies moving to section 200/201 (206(3)); foreign companies keep the old set-off method (206(4)).

Is section 115JB still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 115JB of the 1961 Act. Section 206 (115JC AMT also 206) of the 2025 Act applies from tax year 2026-27.

Related sections

115BAA→200Concessional 22% tax rate option for domestic companies32→33Depreciation on tangible and intangible business assets44AB→63Tax audit of accounts for businesses and professions above turnover limits