Latest news with #AlternativeMinimumTax
Economic Times
6 days ago
- Business
- Economic Times
New Income Tax Bill provides simple framework to enhance ease of doing biz: ICAI
Synopsis The ICAI hailed the new Income Tax Bill, passed by Parliament, as a framework that simplifies taxation and boosts ease of doing business. Effective from April 1, 2026, the bill incorporates around 90 suggestions from ICAI, including AMT applicability and refund claim rules. ICAI believes this will make India a more attractive investment destination. Agencies Representative AI Image Chartered accountants' apex body ICAI on Wednesday said the new Income Tax Bill provides a simple and clear framework that will enhance the ease of doing business and support India's goal of becoming the favoured investment destination. On Tuesday, Parliament passed a new income tax bill to replace the six-decade-old Income Tax Act, 1961, that will come into force from April 1, 2026. The Institute of Chartered Accountants of India (ICAI) said the bill incorporates a significant number of suggestions from the Parliamentary Select Committee, which consulted ICAI and other stakeholders. Around 90 suggestions of the institute have been considered in the bill, ICAI said in a statement on Wednesday. The suggestions included the applicability of Alternative Minimum Tax (AMT) to only those persons who have claimed deductions in respect of certain income or investment-linked tax deduction, and removal of requirement to file return on or before due date for claiming refund. "By streamlining the structure and provisions, the new Bill reflects the government's commitment to enhancing ease of doing business by providing a tax framework that is simple and clear, thus, supporting India's goal of becoming the favoured destination for investment," ICAI said. Other suggestions made were those related to the year of allowability of expenditure where tax deduction takes place in the subsequent year and the applicability of the presumptive rate of 6 per cent for receipts in online mode up to the due date of filing of return.
Time of India
6 days ago
- Business
- Time of India
New Income Tax Bill provides simple framework to enhance ease of doing biz: ICAI
Chartered accountants' apex body ICAI on Wednesday said the new Income Tax Bill provides a simple and clear framework that will enhance the ease of doing business and support India's goal of becoming the favoured investment destination . On Tuesday, Parliament passed a new income tax bill to replace the six-decade-old Income Tax Act, 1961, that will come into force from April 1, 2026. Finance Value and Valuation Masterclass - Batch 4 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program Finance Value and Valuation Masterclass - Batch 3 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals By Vaibhav Sisinity View Program Finance Value and Valuation Masterclass - Batch 2 By CA Himanshu Jain View Program Finance Value and Valuation Masterclass Batch-1 By CA Himanshu Jain View Program The Institute of Chartered Accountants of India (ICAI) said the bill incorporates a significant number of suggestions from the Parliamentary Select Committee, which consulted ICAI and other stakeholders. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like You will never turn off your computer again. Undo Around 90 suggestions of the institute have been considered in the bill, ICAI said in a statement on Wednesday. The suggestions included the applicability of Alternative Minimum Tax (AMT) to only those persons who have claimed deductions in respect of certain income or investment-linked tax deduction, and removal of requirement to file return on or before due date for claiming refund. Live Events "By streamlining the structure and provisions, the new Bill reflects the government's commitment to enhancing ease of doing business by providing a tax framework that is simple and clear, thus, supporting India's goal of becoming the favoured destination for investment," ICAI said. Other suggestions made were those related to the year of allowability of expenditure where tax deduction takes place in the subsequent year and the applicability of the presumptive rate of 6 per cent for receipts in online mode up to the due date of filing of return.
News18
6 days ago
- Business
- News18
New Income Tax Bill provides simple framework to enhance ease of doing biz: ICAI
New Delhi, Aug 13 (PTI) Chartered accountants' apex body ICAI on Wednesday said the new Income Tax Bill provides a simple and clear framework that will enhance the ease of doing business and support India's goal of becoming the favoured investment destination. On Tuesday, Parliament passed a new income tax bill to replace the six-decade-old Income Tax Act, 1961, that will come into force from April 1, 2026. The Institute of Chartered Accountants of India (ICAI) said the bill incorporates a significant number of suggestions from the Parliamentary Select Committee, which consulted ICAI and other stakeholders. Around 90 suggestions of the institute have been considered in the bill, ICAI said in a statement on Wednesday. The suggestions included the applicability of Alternative Minimum Tax (AMT) to only those persons who have claimed deductions in respect of certain income or investment-linked tax deduction, and removal of requirement to file return on or before due date for claiming refund. 'By streamlining the structure and provisions, the new Bill reflects the government's commitment to enhancing ease of doing business by providing a tax framework that is simple and clear, thus, supporting India's goal of becoming the favoured destination for investment," ICAI said. Other suggestions made were those related to the year of allowability of expenditure where tax deduction takes place in the subsequent year and the applicability of the presumptive rate of 6 per cent for receipts in online mode up to the due date of filing of return. PTI RAM TRB (This story has not been edited by News18 staff and is published from a syndicated news agency feed - PTI) view comments First Published: Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Yahoo
13-03-2025
- Business
- Yahoo
How to Calculate the Alternative Minimum Tax (AMT)
The alternative minimum tax (AMT) calculation determines whether a taxpayer must pay an additional amount beyond their regular income tax liability. To calculate AMT, taxable income is adjusted by adding back certain deductions to determine alternative minimum taxable income (AMTI). An exemption is then applied, though it phases out at higher income levels. After subtracting the exemption, the remaining AMTI is taxed. If the calculated AMT exceeds the regular tax liability, the taxpayer must pay the difference. A with tax expertise can help you plan for AMT and other tax liabilities. . AMT is a separate tax system designed to limit the use of deductions and credits that could significantly lower a taxpayer's federal income tax liability. It applies primarily to high-income individuals who claim substantial deductions, exercise incentive stock options or earn income from tax-preferred investments. Common AMT triggers include high state and local tax (SALT) deductions, large capital gains, incentive stock options and certain business expenses. IRS Form 6251 helps determine AMT liability by guiding taxpayers through necessary income adjustments and tax calculations. AMT applies only if the calculated AMT liability exceeds the amount owed under the standard tax system. To offset some of its impact, AMT includes an exemption amount, which phases out for taxpayers with higher incomes. While adjustments for inflation have reduced its reach, AMT still affects those with complex financial situations, particularly individuals with large capital gains or deductions relative to their earnings. SmartAsset and Yahoo Finance LLC may earn commission or revenue through links in the content below. The AMT calculation follows a process separate from regular income tax, adjusting taxable income and applying different rates. Here's how to determine AMT liability. Begin with your regular taxable income, and then add back deductions not allowed under AMT. These include SALT deductions, certain business expenses and miscellaneous itemized deductions. Income from incentive stock options (ISOs) and certain municipal bond interest may also need to be included. The 2025 AMT exemption is $88,100 for single filers and $137,000 for joint filers. However, if alternative minimum taxable income exceeds $626,350 for single filers or $1,252,700 for joint filers, the exemption is gradually reduced by 25% of the excess amount. 2025 Alternative Minimum Tax (AMT) Exemption Thresholds Filing Status Exemption Amount Phaseout Threshold Complete Phaseout Married Filing Jointly or Surviving Spouse $137,000 $1,252,700 $1,800,700 Unmarried Individuals $88,100 $626,350 $978,750 Married Filing Separately $68,500 $626,350 $900,350 Estates and Trusts $30,700 $102,500 $225,300 For all filers, with the exception of those married filing separately, AMTI remaining after the exemption is taxed at 26% on the first $239,100 and 28% on any income above that. The threshold for those married filing separately is $119,500. For example, a married couple filing jointly with $1.4 million in AMTI exceeds the $1,252,700 threshold by $147,300. The exemption is reduced by 25% of this excess ($36,825), leaving a final exemption of $110,475 ($147,300 – $36,825). The taxable AMTI is then $1,289,525. The first $239,100 is taxed at 26% ($62,166), while the remaining $1,060,725 is taxed at 28% ($297,003), bringing the total AMT liability to $359,169. Lastly, the tentative AMT is compared to the taxpayer's regular income tax. If it is higher, the difference must be paid as AMT. For example, if the couple's regular income tax liability would have been $300,000 thanks to various deductions, they would still have to pay the higher AMT amount. Taxpayers who anticipate being subject to AMT can take steps to reduce their liability or prepare for the added cost. One approach is to time income and deductions strategically. For example, they might defer capital gains or accelerate deductible expenses in years when AMT is less likely to apply. Since SALT deductions are disallowed under AMT, high-income filers may benefit from managing property tax payments or considering tax-efficient investments. Using AMT-friendly investments, such as tax-exempt municipal bonds that are not subject to AMT rules, can help reduce AMTI. For those with ISOs, exercising options strategically or selling shares within the same tax year can prevent unexpected AMT liabilities. Consulting a tax professional before making major financial decisions can help identify tax-efficient strategies and ensure AMT liability is factored into overall financial planning. AMT affects certain taxpayers by adjusting income calculations and limiting deductions, leading to a separate tax liability if the AMT exceeds regular tax obligations. While inflation adjustments have reduced its reach, individuals with high capital gains, large deductions or incentive stock options may still be subject to it. Understanding how to calculate AMT allows for better financial planning, whether through tax-efficient investments, strategic timing of income or managing deductions. Reviewing potential AMT exposure before year-end can help taxpayers anticipate any additional liability and explore strategies to minimize its impact where possible. Starting at age 73, retirees must begin taking required minimum distributions (RMDs) from tax-deferred accounts like traditional IRAs and 401(k)s. These distributions increase taxable income and can push individuals into higher tax brackets. Strategies such as Roth conversions before RMD age or qualified charitable distributions (QCDs), which allow tax-free donations to charities directly from an IRA, can help reduce taxable income and manage RMD-related tax burdens effectively. A financial advisor who offers tax planning services can be a valuable resource if you're looking for ways to reduce your tax liability. Finding a financial advisor doesn't have to be hard. SmartAsset's free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now. Photo credit: © © Onphalai, © post How to Calculate the Alternative Minimum Tax (AMT) appeared first on SmartReads by SmartAsset. Sign in to access your portfolio
