UPSC Prelims 1997·GS1·economy·public finance

The Minimum Alternative Tax (MAT) was introduced in the Budget of the Government of India for the year

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  1. A1991-92
  2. B1992-93
  3. C1995-96
  4. D1996-97Correct

Explanation

The correct answer is D because Minimum Alternate Tax was introduced by the then Finance Minister P. Chidambaram in the Union Budget of 1996-97. It was brought in to target zero tax companies that were making significant profits and paying out dividends to shareholders but were not paying any income tax by taking advantage of various exemptions and deductions under the Income Tax Act. While a similar concept called tax on book profits existed briefly in the late 1980s, the specific provision currently known as MAT was formally established in 1996.
economy: The Minimum Alternative Tax (MAT) was introduced in the Budget of the Government of India for the year
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