MAT Changes in Union Budget 2026 – What Businesses Must Know

The Union Budget 2026–27, presented by Hon’ble Finance Minister Smt. Nirmala Sitharaman, has introduced significant reforms to the Minimum Alternate Tax (MAT) regime — aimed at simplifying corporate tax compliance and encouraging businesses to migrate to the new tax regime.

🔎 Key MAT Proposals in Budget 2026:
• MAT rate reduced to 14% (from existing 15%) — effective from tax year 2026–27.
• MAT to be treated as a final tax under the old regime — ending the traditional carry-forward and set-off for credits.
• MAT credit utilisation restricted — available only to companies that switch to the new tax regime, capped at 25% of tax liability in those years.
• No new MAT credit accumulation from April 1, 2026, onwards.
• Exemptions extended to certain non-resident companies (including those under presumptive taxation) — encouraging inbound investment and ease of doing business.

💡 Why This Matters:
These reforms represent a major overhaul of MAT mechanics — shifting the focus from protecting minimum revenue to incentivising adoption of the new corporate tax regime and reducing compliance complexity. Companies should now evaluate their tax strategies, especially if they are considering a regime shift or managing MAT credit balances.

📌 Action Steps for CFOs & Tax Professionals:
✔ Review MAT position and credit balance as of 31 March 2026
✔ Evaluate benefits of migrating to the new tax regime
✔ Update projections considering restricted MAT set-off limits

At Corporate Genie, we help businesses interpret budgetary tax changes into practical planning and compliance action plans.

📩 Connect with us for Budget 2026 impact analysis and strategic support.

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