(1) Notwithstanding anything contained in any other provision of this Act, the minimum tax shall be payable by the taxpayer, subject to the provisions of this section.

(2) Subject to sub-section (3), the minimum tax shall be paid on income from such sources as deducted or collected under certain sections —

(a)   the tax deducted or collected under the clauses mentioned in clause (b) shall be deemed to be the minimum tax on the income from one or more sources in respect of which the tax is deducted or collected;

(b)   the tax referred to in clause (a) shall be deemed to be tax deducted or collected under sections 88-92, 94-95, 100-102, 105, 106, 108, 110-118, 120-129 and 132-139;

(c)   accounts shall be kept regularly in accordance with the provisions of section 72 for such source or sources of income to which the minimum tax is applicable;

(d)   the income from any such source for which the minimum tax is payable under this sub-section shall be determined in a regular manner and tax shall be calculated on such income at the applicable rate; If the tax so calculated is more than the minimum tax under clause (a), the higher tax shall be payable on the said income;

(e)   the income or loss computed under clause (d) shall not be adjusted against the income or loss computed for any regular source respectively.

(3) Tax deducted or collected from the following sources, for the purpose of sub-section (2), shall not be treated as minimum tax, namely: -

(a) Excluded in mentioned Tax Assessment Year 

(b)   tax collected under section 120 on goods imported by any industrial undertaking other than an industrial undertaking engaged in the manufacture of cement, iron or ferrous products, ferro alloy products or perfumes, milk powder, aluminum products, ceramic products, carbonated beverages and toilet water for its own use as raw materials.

(4) Where a taxpayer has income from regular sources in addition to income from one or more such sources to which minimum tax is applicable under sub-section (2), in that case-

(a)   regular tax shall be assessed on income from regular sources;

(b)   the tax of such taxpayer shall be the sum of the tax assessed under sub-section (2) and the regular tax under clause (a);

(5) Subject to the provisions of sub-section (6), a person irrespective of profit or loss shall be liable to pay minimum tax in accordance with the provisions of clauses (a) and (b) on his gross receipts:-

(a) any company, any trust, any such firm having gross receipts of not less than fifty (fifty) lakhs of rupees, or association of persons, any such natural person having gross receipts of not less than three (three) crores of rupees in any tax year at the rate specified in the table below; will be liable to pay minimum taxes. 

Provided, however, that Serial No. 6 of the said table is applicable in such cases, in the case of any industrial establishment engaged in the production of goods, the said rate shall be 0.1% (zero decimal one percent) of such receipts for the first 3 (three) years of the commencement of its commercial production. 

(b)   where the assessee has an income from any source that is exempted, the gross receipts from such source or sources shall be shown separately, and the minimum tax under this sub-section shall be calculated in the following manner-

i) minimum tax for receipts from sources that are subject to regular tax rate shall be calculated by applying the rate mentioned in clause (a);

ii) minimum tax for receipts from sources that enjoys tax exemption or reduced tax rate shall be calculated by applying the rate mentioned in clause (a) reduced in proportion to the exemption of tax or the reduction of rate of tax;

iii) minimum tax under this sub-section shall be the aggregate of the amounts calculated under sub-clauses (i) and (ii).

(6) Where both the provisions of sub-section (4) and sub-section (5) apply to a taxpayer, the minimum tax payable by that taxpayer shall be:

(a) the minimum tax under sub-section (4); or

(b) the minimum tax under sub-section (5), whichever is higher. 

(7) The minimum tax adjusted under this section shall be determined as follows:

(a) The minimum tax calculated under sub-section (2) shall not be refundable or adjustable;

(b) If during the calculation of tax under sub-section (6) there is an excess of the minimum tax paid under sub-section (2), the returns made in the previous tax years shall be adjusted with such excess figure.

(8) Where any surcharge, any additional interest, any additional sum, etc., is payable under the provisions of this Act, it shall be payable in addition to the minimum tax.

(9) Where the regular tax computed in any tax year exceeds the minimum tax under this section, the regular tax shall be payable. 

(10) In this section—

(a)   “regular source” means a source to which the minimum tax under sub-section (2) does not apply;

(b)   “regular tax” means tax computed on regular income using the regular method;

(c)   “regular rate of tax” means the rate of tax which would have been applicable unless an exempted or reduced rate of tax had been allowed.

(d)   “gross receipts” means-

(i) all proceeds derived from the sale of goods;

(ii) all fees or charges received for providing services or facilities, including commissions and discounts;

(iii) All receipts derived from any heads of income.

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