What Is Alternate Minimum Tax (AMT)?

Which AMT Law Applies in 2026?

The governing law depends on when the income was earned, not when the return is filed. 

Note: Financial Year (FY) refers to the period in which income was earned. Assessment Year (AY) refers to the following year in which that income is assessed under the 1961 Act.

A return filed after 1 April 2026 for income earned during FY 2025-26 still follows the 1961 Act. The filing date does not move that income into the new Act.

Who Must Check AMT and When Is It Payable?

Under the Income-tax Act, 2025, section 206(2) applies when a non-company taxpayer claims either a deduction under Chapter VIII-C, other than section 149, or a deduction under section 46. The following exclusions and thresholds then apply:

How to Calculate Adjusted Total Income and AMT

For Income Earned Up to 31 March 2026

Under the Income-tax Act, 1961, start with total income and add back:

• Chapter VI-A, Part C deductions, except section 80P
• The section 10AA deduction
• The section 35AD deduction, after subtracting the depreciation that would have been allowable under section 32

For Income Earned From 1 April 2026

Under the Income-tax Act, 2025, start with total income and add back:

• Chapter VIII-C deductions, except section 149
• The section 46 deduction, after subtracting the depreciation that would have been allowable under section 33

Adjusted total income = Total income + applicable AMT adjustments

For Tax Year 2026-27 onward:

AMT = Adjusted total income × applicable AMT rate

The applicable surcharge and 4% Health and Education Cess are added after the tax is calculated.

Start with the deductions claimed in the tax return, not the profit shown in the accounts. Add back only the deductions and depreciation adjustments listed above.

Under the 2025 Act, the depreciation adjustment is limited to depreciation connected with the section 46 deduction.

Worked Example: LLP in Tax Year 2026-27

Assume an LLP earns ₹90,00,000 before claiming a qualifying Chapter VIII-C deduction of ₹40,00,000.

No surcharge applies because the relevant income does not exceed ₹1 crore.

The example isolates the AMT calculation. An actual return could also include income taxed at special rates, Foreign Tax Credit, brought-forward losses or marginal relief.

How AMT Credit Works

When AMT exceeds regular income-tax, the excess becomes AMT credit under section 206(2)(e).

Credit Created Under the 1961 Act

Unused AMT credit created under section 115JD of the Income-tax Act, 1961 remains available after 1 April 2026. It retains its remaining original life and does not receive a new 15-year period. 

AMT Forms and Filing Deadlines

For income earned from 1 April 2026, taxpayers covered by AMT must have a Chartered Accountant certify the calculation in Form 67. This form is prescribed under Rule 138 of the Income-tax Rules, 2026, notified through G.S.R. 198(E) on 20 March 2026. For income earned up to 31 March 2026, the Chartered Accountant must use Form 29C instead.

Normal Form 67 Deadlines Under the 2025 Act

Form 67 is normally due one month before the income-tax return. The exact date depends on the taxpayer’s filing category.

These dates fall in the financial year following the relevant tax year. For example, the normal Form 67 deadline for an audited taxpayer for Tax Year 2026-27 is 30 September 2027.

Special AY 2026-27 Extension

For taxpayers covered by Central Board of Direct Taxes Circular No. 7/2026:

Section 115JC(3) links Form 29C to the specified date referred to in section 44AB. Therefore, a covered AMT taxpayer must furnish Form 29C by 21 October 2026.

For AY 2026-27, the notified ITR-5 contains Schedule AMT for the current-year calculation and Schedule AMTC for AMT credit.

Do Not Confuse AMT With MAT

Alternate Minimum Tax (AMT) applies to eligible taxpayers other than companies and is calculated on adjusted total income. Minimum Alternate Tax (MAT) applies to companies and is calculated on book profit.

Do not use MAT adjustments, such as reserves, deferred tax or Companies Act depreciation, when calculating AMT. Only the adjustments specified under the AMT provisions should be added to total income.

What to Check Before Filing

Before filing the tax return, check these four records:

• List each AMT-related deduction, the amount claimed and the relevant tax section.
• If a special deduction was claimed for business assets, keep a separate calculation of the related depreciation.
• Track AMT credit separately for each year, including the amount created, used, remaining and due to expire.
• Make sure the figures in Form 29C or Form 67 match the figures reported in the income-tax return.

Conclusion

AMT can turn a tax deduction into a higher tax payment for the year. The resulting credit can be used only when regular income-tax exceeds AMT in a later year, and unused credit eventually expires. Review the AMT effect before claiming a major deduction, not after preparing the return. Before filing, check the deduction amounts, depreciation adjustments, available credit and reporting form with your Chartered Accountant.