Section 115JC: Alternate Minimum Tax for Non-Company Taxpayers
Section 115JC introduced Alternate Minimum Tax (AMT) for specified taxpayers other than companies. The objective is to ensure a minimum tax contribution where eligible deductions reduce regular income-tax below a prescribed percentage of adjusted total income. For tax years beginning 1 April 2026, the corresponding framework is in section 206(2) of the Income-tax Act, 2025.
What is Alternate Minimum Tax under Section 115JC?
Alternate Minimum Tax is a minimum income-tax calculation for certain non-corporate assessees. It compares (a) the income-tax payable under the normal provisions with (b) tax calculated at the applicable AMT rate on adjusted total income. Where AMT is higher, the taxpayer generally pays AMT, subject to statutory conditions and exceptions. Companies are instead addressed by the separate Minimum Alternate Tax (MAT) framework.
Section 115JC(1) of the 1961 Act provided that, where regular income-tax was lower than AMT, adjusted total income would be deemed total income for AMT purposes. The corresponding rule under the 2025 Act is section 206(2)(a).
AMT rates for non-company taxpayers
| Eligible category | AMT rate | Conditions |
|---|---|---|
| General non-company taxpayers | 18.5% | Where AMT provisions apply and no special rate applies |
| Co-operative societies | 15% | Subject to statutory applicability and tax-regime exclusions |
| Qualifying IFSC units | 9% | Unit located in an International Financial Services Centre deriving income solely in convertible foreign exchange |
These are statutory base rates. Applicable surcharge and health and education cess are additional, where required. Under the 2025 Act, see section 206(2)(b)(ii).
Definition of adjusted total income
Adjusted total income means total income determined under the ordinary rules, increased by the specified deductions added back for AMT purposes. Under section 115JC(2) of the 1961 Act, the adjustments included:
- Specified deductions under Part C of Chapter VI-A, excluding section 80P.
- Deduction under section 10AA for qualifying Special Economic Zone units.
- Deduction under section 35AD for specified businesses, reduced by depreciation that would have been allowable under section 32 if the section 35AD deduction had not been claimed.
Under section 206(2)(b)(i) of the Income-tax Act, 2025, the corresponding references include deductions under Chapter VIII-C (other than section 149) and section 46, adjusted for depreciation under section 33. These are revised section references; they should not be confused with the corresponding provisions of the 1961 Act.
AMT calculation: illustrative example
| Particulars | Amount (Rs.) |
|---|---|
| Total income under ordinary provisions | 30,00,000 |
| Specified deduction to be added back | 10,00,000 |
| Adjusted total income | 40,00,000 |
| AMT at 18.5% (before cess and surcharge) | 7,40,000 |
| Assumed regular income-tax (before cess and surcharge) | 6,00,000 |
| Excess AMT over regular tax | 1,40,000 |
This simplified example assumes the taxpayer is subject to the general AMT rate and eligible for the AMT regime. Actual liability depends on the relevant tax year, applicable deductions, rates, cess, surcharge and other statutory adjustments.
When does AMT not apply?
- No relevant deduction: Section 206(2)(c) of the 2025 Act links AMT to specified deduction claims.
- Rs. 20 lakh threshold: Individuals, HUFs, associations of persons, bodies of individuals and specified artificial juridical persons are excluded if adjusted total income does not exceed Rs. 20 lakh. This threshold is not a blanket exemption for every category of taxpayer.
- Specified concessional regimes: Persons exercising the relevant options under sections 203(5) or 204(2), and persons taxed under section 202(1), are excluded as provided by section 206(2)(d).
- Specified funds: The statutory exclusion for qualifying specified funds applies subject to the relevant conditions.
Under the former Act, the corresponding exclusions were primarily addressed by sections 115JEE and 115BAC/115BAD/115BAE, as applicable. Always confirm the elected regime for the year concerned.
Accountant's report and AMT credit
Accountant certification: Section 115JC(3) required an accountant's report certifying adjusted total income and AMT, furnished by the prescribed return-filing deadline. The 2025 Act addresses the reporting requirement in section 206(2)(j), with reference to the specified date under section 63. For earlier assessment years, the prescribed report is generally Form 29C; for later years, check the forms and rules notified under the new Act.
AMT credit: If AMT exceeds regular income-tax, the excess may generate AMT credit, subject to the statutory rules. Under the 1961 Act, section 115JD dealt with AMT credit. Under the 2025 Act, section 206(2)(e) to (i) addresses credit, its use and adjustments. Credit can generally be carried forward for up to 15 subsequent tax years and used when regular tax exceeds AMT, limited to that excess. No interest is payable on AMT credit.
Section 115JC of the Income-tax Act, 1961: historical provisions
The earlier provision was inserted with effect from 1 April 2012, initially focusing on limited liability partnerships, and was expanded to certain other non-company persons from 1 April 2013. Later changes covered deductions, IFSC units and related exceptions. Its text must be read together with sections 115JD, 115JE, 115JEE and 115JF and the amendments applicable to the relevant assessment year.
Read the original page's statutory extract and amendment notes
115JC Income Tax Act - Special provisions for payment of tax by certain persons other than a company
Section 115JC of Income Tax Act 1961 - Special provisions for payment of tax by certain persons other than a company
1,2,3(1) Notwithstanding anything contained in this Act, where the regular income-tax payable for a previous year by a person, other than a company, is less than the alternate minimum tax payable for such previous year, the adjusted total income shall be deemed to be the total income of that person for such previous year and he shall be liable to pay income-tax on such total income at the rate of eighteen and one-half per cent.
(2) Adjusted total income referred to in sub-section (1) shall be the total income before giving effect to this Chapter as increased by-
(i) deductions claimed, if any, under any section (other than section 80P) included in Chapter VIA under the heading "C.-Deductions in respect of certain incomes"; 4 ***
(ii) deduction claimed, if any, 5 under section 10AA; and
6 (iii) deduction claimed, if any, under section 35AD as reduced by the amount of depreciation allowable in accordance with the provisions of section 32 as if no deduction under section 35AD was allowed in respect of the assets on which the deduction under that section is claimed.
(3) Every person to whom this section applies shall obtain a report, in such form as may be prescribed, from an accountant, certifying that the adjusted total income and the alternate minimum tax have been computed in accordance with the provisions of this Chapter and furnish such report on or before the due date of furnishing of return of income under sub-section (1) of section 139.
7 (4) Notwithstanding anything contained in sub-section (1), where the person referred to therein, is a unit located in an International Financial Services Centre and derives its income solely in convertible foreign exchange, the provisions of sub-section (1) shall have effect as if for the words "eighteen and onehalf per cent.", the words "nine per cent." had been substituted.
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1. Ins. by Act 8 of 2011, s. 19 (w.e.f. 1-4-2012).
2. Subs. by Act 23 of 2012, s. 49, for "LIMITED LIABILITY PARTERSHIPS" (w.e.f.
1-4-2013).
3. Subs. by s. 50, ibid., for section 115JC (w.e.f. 1-4-2013).
4. The "word" omitted by Act 25 of 2014, s. 39 (w.e.f. 1-4-2015).
5. Subs. by s. 39, ibid., for "under section 10AA" (w.e.f. 1-4-2015).
6. Ins. by s. 39, ibid. (w.e.f. 1-4-2015).
7. Ins. by Act 13 of 2018, s. 38 (w.e.f. 1-4-2019).
Frequently asked questions
Is Section 115JC applicable to companies?
No. It concerned specified persons other than companies. Corporate MAT is a separate regime.
Is the AMT rate always 18.5%?
No. The 2025 Act also provides 15% for co-operative societies and 9% for qualifying IFSC units, subject to statutory conditions.
Does the Rs. 20 lakh threshold exempt every non-company taxpayer?
No. It applies to the specified classes of persons in section 206(2)(d)(iii), not automatically to every LLP or co-operative society.
Can AMT credit be carried forward?
Yes, subject to eligibility and limits, generally for up to 15 subsequent tax years under section 206(2)(g).
What provision applies from 1 April 2026?
Section 206(2) of the Income-tax Act, 2025 governs the corresponding AMT regime for tax year 2026-27 onward.
Official legal sources
- Income-tax Act, 2025 - official full text (section 206)
- Income Tax Department - Section 115JC, Income-tax Act, 1961
- Income Tax Department - Minimum Alternate Tax and Alternate Minimum Tax guide
- Income-tax Act, 1961 as amended by Finance Act, 2025
Last reviewed: 27 October 2026. This article provides general information, not a substitute for advice based on an assessee's circumstances and the law applicable to a particular tax year.