Section 115JC of the Income Tax Act: Alternative Minimum Tax Explained

Last updated: Oct 2026

Section 115JC makes sure that a non-corporate taxpayer who claims large profit-linked deductions still pays a minimum tax. You pay the higher of your regular tax and the alternative minimum tax (AMT).

• Rate under Section 115JC: 18.5% of adjusted total income, plus surcharge and cess
• Trigger: deductions under Chapter VI-A Part C, Section 10AA or Section 35AD
• Threshold: AMT does not apply to an individual, Hindu Undivided Family (HUF), association of persons or body of individuals at Rs. 20 lakh or below
• Credit: AMT paid above regular tax is carried forward for 15 assessment years

• Report: Form 29C from a Chartered Accountant

  
  

Compute both taxes before you file, and keep Form 29C ready. Section 80C and similar investments do not trigger AMT, so most salaried people never meet this section.

Section 115JC is the provision for alternative minimum tax. It applies to non-corporate persons, such as individuals, HUFs, firms, limited liability partnerships (LLPs) and co-operative societies. Companies pay minimum alternate tax under Section 115JB instead.

The Finance Act, 2016 introduced the section in its current form. Under the Income Tax Act, 2025, Sections 115JAA, 115JB and 115JC are replaced by Section 206.

You pay it only if you claim specific deductions, and the Rs. 20 lakh floor protects only certain taxpayers.

The specified deductions are those under Chapter VI-A Part C (such as Section 80-IA), Section 10AA for special economic zones and Section 35AD for specified businesses. The rates for co-operative societies and IFSC units come from two third-party guides.

Add back the specified deductions to your total income, then apply 18.5%.

Formula used: Adjusted total income = total income + specified deductions. AMT = 18.5% × adjusted total income. Tax payable = higher of AMT and regular tax.

The figures below leave out surcharge and 4% cess.

The individual pays AMT because it is higher. The LLP pays its regular tax, because that is higher, so no credit arises.

The excess of AMT over regular tax becomes a credit that you can carry forward for 15 assessment years. You use it in a year when your regular tax exceeds AMT.

Formula used: Credit set off in a year = lower of (credit available, regular tax − AMT of that year).

Section 115JD governs the credit, which is a prepayment of tax for the Section 115JC year. It carries no interest. In the individual's case above, Rs. 3,05,000 carries forward. In a later year with regular tax of Rs. 6,00,000 and AMT of Rs. 4,50,000, the set-off is limited to Rs. 1,50,000, and Rs. 1,55,000 remains.

AMT is applicable in the following scenarios:

• Taxpayers claiming deductions under sections such as 10AA (Special Economic Zone benefits) or 35AD (specified business deductions).
• Individuals or entities with adjusted total income exceeding Rs. 20 lakh.
• Companies and LLPs availing specified deductions.

Alternate Minimum Tax (AMT), replacing Form 29C. The earlier Form 67 used for claiming foreign tax credit has been replaced by Form 44. Do not confuse the two. See the guide to Form 67 and foreign tax credit.

Consider Rajiv, a 48-year-old hotel owner in Nashik with a household income of Rs. 4.5 lakh a month and a CIBIL Score of 769. He claims Rs. 25 lakh under Section 35AD on a new specified business, and his total income is Rs. 30 lakh.

His credit is not lost, but it is a prepayment. Rajiv asks his Chartered Accountant to plan the year when the credit is used. The tax-regime choice is explained in the guide to tax regime meaning.

Bajaj Finance assesses self-employed applicants on returns and financial statements. AMT paid reduces the income left after tax, so show it with your returns and the Form 29C.

Approval timelines can extend where returns show AMT or a credit that needs explaining, and minimum income thresholds can differ by city. Check your home loan eligibility.