Budget 2026: MAT Relief for Non-Resident Businesses Operating Under Presumptive Taxation

The Finance Minister, Smt Nirmala Sitharaman, presented the Union Budget 2026-27 on February 1, 2026, where she announced significant relief for the non-resident businesses opting for presumptive taxation. This aims to ensure the same tax treatment for all non-resident businesses.

Starting from April 2026 (Tax Year 2026-27 and onwards), the Minimum Alternate Tax (MAT) will not apply to certain non-resident businesses operating under presumptive taxation in India. These businesses include:

• Non-resident businesses operating cruise ships, and
• A non-resident business offering services or technology for setting up an electronics manufacturing facility in India for a resident.

Minimum Alternate Tax (MAT) requires companies to pay a minimum tax if their normal tax liability is lower. Currently, some foreign companies get the MAT exemption. Non-residents choosing presumptive taxation under Section 61 for certain businesses are also MAT-exempt. However, two specified businesses, including the cruise ship operators and the business offering services for technology, still faced MAT.

Therefore, to ensure the same treatment across all different specified businesses of the non-residents opting for presumptive taxation, Budget 2026 proposed to exclude the applicability of MAT for the business of operation of cruise ships and the business of providing services or technology for the setting up of an electronics manufacturing facility in India to a resident company.