MAT made final tax from April 2026: What does that mean under Union Budget 2026 tax overhaul
Under the proposed changes, companies paying MAT will no longer be allowed to carry forward or utilise MAT credit beyond April 1, 2026. Until now, firms that paid MAT, typically due to exemptions or incentives lowering their regular tax liability, could carry forward the excess tax paid and set it off against future regular tax dues.
In a significant overhaul of the Minimum Alternate Tax (MAT) framework, the Union Budget 2026 has proposed to make MAT a final tax from April 1, 2026, while simultaneously lowering the applicable rate. The move represents a structural shift in corporate taxation and is aimed at simplifying compliance while nudging companies toward the newer, lower corporate tax regime.
Under the proposed changes, companies paying MAT will no longer be allowed to carry forward or utilise MAT credit beyond April 1, 2026. Until now, firms that paid MAT, typically due to exemptions or incentives lowering their regular tax liability, could carry forward the excess tax paid and set it off against future regular tax dues. With MAT now becoming a terminal levy, this long-standing credit mechanism will be discontinued.
