Budget Proposes 14% Minimum Alternate Tax Final Levy For Companies Opting New Regime From April 2026

The Union Budget 2026–27 on Sunday proposed changes to the Minimum Alternate Tax (MAT) regime applicable to companies, to take effect from April 1, 2026, alongside the implementation of the Income Tax Act, 2025.

Presenting the budget, Finance Minister Nirmala Sitharaman said, “I propose to make Minimum Alternate Tax a final tax for companies opting for the new tax regime.”

She further announced a reduction in the rate, stating, “The MAT rate is proposed to be reduced to 14 per cent.”

The proposal reduces the Minimum Alternate Tax rate from the existing 15% to 14% for companies opting for the new tax regime.

On accumulated MAT credit, the Finance Minister said, “Carry forward and set-off of accumulated MAT credit will be allowed only to a limited extent under the new tax regime.”

The Budget speech stated that the proposed changes would operate in the context of the transition to the new Income Tax Act, which is scheduled to replace the Income Tax Act, 1961 from April 1, 2026.