Q. What is the primary purpose of Minimum Alternate Tax (MAT)?
Answer: To prevent tax avoidance
Notes: Minimum Alternate Tax (MAT) is implemented in India to ensure that companies with significant profits but low or no tax liability contribute a minimum amount to the government. Introduced in 1987, MAT aims to curb tax avoidance strategies that exploit loopholes in the tax system. It applies to companies whose tax payable is less than a specified percentage of their book profits, thus ensuring a fair tax contribution.