Indian income-tax law | Updated October 2026
Section 115JF of Income-tax Act, 1961: Interpretation and AMT Definitions
Section 115JF explains the technical expressions used in Chapter XII-BA, the framework for Alternate Minimum Tax (AMT) on specified taxpayers other than companies. This guide explains each definition, the relevant AMT rates, and the corresponding framework under the Income-tax Act, 2025.
What is Section 115JF?
Section 115JF is the interpretation clause in Chapter XII-BA of the Income-tax Act, 1961. It does not independently impose a tax. Instead, it defines expressions necessary to apply Section 115JC (AMT computation), Section 115JD (AMT credit), Section 115JE (other provisions) and Section 115JEE (applicability).
For a relevant assessment year governed by the 1961 Act, these provisions must be read together. For tax years starting 1 April 2026, consult the applicable provisions of the Income-tax Act, 2025.
Definitions under Section 115JF
Clause (a): Accountant
"Accountant" has the meaning assigned in the Explanation below Section 288(2) of the 1961 Act. The term is relevant to the certification and reporting requirements under Section 115JC(3), including the prescribed AMT report (Form 29C under the earlier regime).
Clause (b): Alternate minimum tax
AMT means the amount of tax calculated on adjusted total income at the rate prescribed for the relevant category of taxpayer. The general rate is 18.5%, subject to specified lower rates. These are statutory base rates; applicable surcharge and health and education cess are considered separately.
Clause (ba): Convertible foreign exchange
Convertible foreign exchange means foreign exchange treated by the Reserve Bank of India as convertible for purposes of the Foreign Exchange Management Act, 1999, and the rules made under it. This definition matters for qualifying IFSC units.
Clause (bb): International Financial Services Centre
"International Financial Services Centre" (IFSC) has the meaning given in Section 2(q) of the Special Economic Zones Act, 2005. A qualifying IFSC unit deriving income solely in convertible foreign exchange may qualify for the special 9% AMT rate, subject to the relevant conditions.
Clause (d): Regular income-tax
Regular income-tax is the income-tax payable by a person on total income computed under the provisions of the 1961 Act other than Chapter XII-BA. This is compared with AMT to decide whether AMT applies and, in a later eligible year, whether AMT credit can be set off.
Clause (e): Unit
"Unit" means a unit established in an International Financial Services Centre.
The former clause (c) was omitted with effect from 1 April 2013; the omitted clause should not be treated as a current definition.
AMT rates: 18.5%, 15% and 9%
| Category | Base AMT rate | Relevant qualification |
|---|---|---|
| Specified non-company taxpayers generally | 18.5% | Subject to Chapter XII-BA applicability and exceptions |
| Co-operative societies | 15% | Rate reduced from assessment year 2023-24; alternative tax regime elections may exclude AMT |
| Qualifying IFSC units | 9% | Income solely in convertible foreign exchange and other statutory conditions |
The 15% co-operative society rate is a later amendment not reflected in the uploaded historical extract. Rates exclude applicable surcharge and cess.
AMT generally arises where the regular income-tax is lower than AMT computed on adjusted total income. The applicability conditions, including the specified deductions and the Rs. 20 lakh threshold for certain individuals and other persons, are addressed by Section 115JEE rather than by the definitions in Section 115JF alone.
Example: Comparing regular tax with AMT
Assume an eligible non-company taxpayer has adjusted total income of Rs. 30,00,000, the general AMT rate is 18.5%, and regular income-tax before surcharge and cess is Rs. 4,00,000.
| Adjusted total income | Rs. 30,00,000 |
|---|---|
| AMT at 18.5% | Rs. 5,55,000 |
| Regular income-tax | Rs. 4,00,000 |
| Excess AMT over regular tax | Rs. 1,55,000 |
In this simplified example, AMT is higher by Rs. 1,55,000. Subject to the statutory conditions, the excess may give rise to an AMT credit under Section 115JD. Actual liability must account for the applicable tax year, surcharge, cess, tax credits and regime-specific exclusions.
Income-tax Act, 2025: Corresponding AMT provisions
The Income-tax Act, 2025, effective from 1 April 2026, consolidates the AMT regime for non-company taxpayers in Section 206(2). In particular, Section 206(2)(b) defines adjusted total income, alternate minimum tax, regular income-tax and an IFSC unit. It provides base AMT rates of 9% for qualifying IFSC units, 15% for co-operative societies and 18.5% in other covered cases.
Section 206(2) also addresses the persons covered, exclusions, AMT credit, carry-forward, set-off and accountant reporting. The newer provision is not merely a renumbering of Section 115JF: it consolidates material previously distributed among Sections 115JC to 115JF.
For assessment years governed by the 1961 Act, apply the law and amendments relevant to that year. For tax years governed by the 2025 Act, consult the amended text of Section 206(2).
Official legal references
Original statutory extract and amendment notes
The following is retained from the earlier webpage for reference. It contains historical text and editorial footnote markers; it is not a fully updated consolidation of the law. In particular, the co-operative society rate change is not shown in the original extract.
Show original Section 115JF extract and historical amendment notes
In this Chapter-
(a) "accountant" shall have the same meaning as in the Explanation below sub-section (2) of section 288;
1 (b) "alternate minimum tax" means the amount of tax computed on adjusted total income,-
(i) in case of an assessee being a unit referred to in sub-section (4) of section 115JC, at a rate of nine per cent.;
(ii) in any other case, at a rate of eighteen and one-half per cent.;
2 (ba) "convertible foreign exchange" means a foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purpose of the Foreign Exchange Management Act, 1999 and the rules made thereunder;
(bb) "International Financial Services Centre" shall have the meaning assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005;
3 * * * * *
(d) "regular income-tax" means the income-tax payable for a previous year by 4 a person on his total income in accordance with the provisions of this Act other than the provisions of this Chapter.
5 (e) "unit" means a unit established in an International Financial Services Centre.
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1. Subs. by Act 13 of 2018, s. 39, for clause (b) (w.e.f.1-4-2019).
2. Ins. by s. 39, ibid. (w.e.f. 1-4-2019).
3. Clause (c) omitted by Act 23 of 2012, s. 54 (w.e.f. 1-4-2013).
4. Subs. by Act 23 of 2012, s. 54, for "a limited liability partnership on its
total income" (w.e.f. 1-4-2013).
5. Ins. by Act 13 of 2018, s. 39 (w.e.f. 1-4-2018).
Frequently asked questions
What does Section 115JF define?
It defines expressions used in Chapter XII-BA, including accountant, alternate minimum tax, regular income-tax, convertible foreign exchange, International Financial Services Centre and unit.
What are the AMT rates under the 1961 Act?
The statutory rates are 18.5% generally, 15% for qualifying co-operative societies, and 9% for qualifying IFSC units. Applicable surcharge and cess may also apply.
Does Section 115JF itself impose AMT?
No. Section 115JF provides definitions; the charging and computation provisions are principally in Section 115JC, subject to the applicability rules in Section 115JEE.
What applies from 1 April 2026?
For tax years governed by the Income-tax Act, 2025, see Section 206(2), which consolidates non-company AMT rules and definitions.
Legal information only. The applicable statutory text, tax year and taxpayer's elected regime determine the final tax treatment. Last editorial review: 27 October 2026.