Question

List any three parties to whom ‘Alternate Minimum Tax’ shall not be applicable.

Hint:

AMT under Section 115JC does not apply to companies, to small incomes up to ₹ 20 lakh, or to those who choose the new regime.

Answer 1

Step 1: Understanding the Concept:
Alternate Minimum Tax (AMT) is charged under Section 115JC. It makes sure that a non-corporate person who enjoys many deductions still pays some minimum tax. It is 18.5% of the adjusted total income. Some persons are kept outside it.

Step 2: Party 1, Persons who claim no specified deduction:
An individual, HUF, Association of Persons, Body of Individuals or artificial juridical person is outside AMT if he has not claimed any deduction under Section 10AA, Section 35AD or Sections 80H to 80RRB (except 80P). Such a person has no special benefit that needs a minimum tax.

Step 3: Party 2, Persons with small income:
A person whose adjusted total income is not more than ₹ 20 lakh does not pay AMT. Small taxpayers are protected by this limit.

Step 4: Party 3, Persons who opt for the new tax regime:
An individual or HUF who chooses the new regime under Section 115BAC does not pay AMT. The new regime gives up most deductions, so AMT has no use.

Final Answer:
AMT does not apply to persons who claim no specified deductions, to persons with adjusted total income up to ₹ 20 lakh, and to persons opting for the new tax regime.