Question

alternative minimum tax is a second tax calculation that affects taxpayers only when it produces a greater tax liability than the regular income tax.

true or false?

Answer 1

When Alternative minimum tax (AMT) is greater then Normal tax ,A ssesse is required to pay the higher amount

If AMT is higher then regular tax then extra tax paid will be available for credit in next year for example

1) Normal tax 150 crores

2) AMT tax 200 crores

3) Tax Payable 200 Crores

4) Tax Credit for carried forward (200-150)= 50 Crores

Hence AMT credit can be utilized in the year when Normal Tax is more then AMT liability

Hence the above statement is false because Alternative minimum tax liability affects every year. even when its lower then Normal /regular income tax liability.