In the General Budget 2011-12, surcharge on domestic companies has been reduced to 5 per cent from the present 7.5 per cent, continuing with the process of phasing out the surcharge. Rate of Minimum Alternate Tax (MAT) has been increased from the current rate of 18 per cent to 18.5 per cent of book profits to keep the effective rate of the MAT at the same level.

Presenting the Budget in the Lok Sabha today, the Union Finance Minister, Shri Pranab Mukherjee said that, MAT would be levied on developers of Special Economic Zones as well as units operating in SEZs.

Minimum Alternate Tax increased while surcharge on domestic companies reduced; MAT extended to Special Economic Zone developers and units. Surcharge on domestic companies is reduced as part of a phase out, and the MAT rate on book profits is marginally increased to maintain the effective MAT burden; MAT is extended to developers of Special Economic Zones and units operating within SEZs.