MAT Full Form is Minimum Alternative Tax. The concept of MAT was first introduced under IT act 1961 in order to charge tax to the ‘zero tax’ companies. In other words, MAT makes companies pay minimum tax. It applies to all companies except the companies that are engaged in power sectors and infrastructure.
Income that come from charitable activities, free trade zones, and investments made by the venture capital companies are all excluded from MAT. Nevertheless, companies that belong to other countries but have source of income from India, are also liable to pay MAT. MAT can be adjusted or carried forward under certain conditions but is payable with the 5 years given period.