Recent slowdown and economic downturn had created a lot of
uncertainty. In order to address the problem and revive the
economy, the government on 20 September 2019 announced major tax
reforms which included the introduction of lower corporate tax
regime by reducing the tax rates from 30/25% to 22% subject to the
condition that such companies would not avail specified tax
incentives/ deductions. Further, it was also announced that Minimum
Alternate Tax (MAT) provisions would also not apply.
While the revised provisions provided that beneficial tax rates
would apply only where specified deductions/allowances are not
claimed, there was no clarity as to whether carried forward losses
on account of additional depreciation would be allowed to be
carried forward. Also, there was confusion on whether MAT credit
would be available for set-off.
