Income Tax Bill 2025: AMT Expansion May Increase Tax Burden on LLPs and Partnership Firms

The proposed Income Tax Bill 2025 includes a significant expansion of the Alternative Minimum Tax (AMT), likely increasing the tax burden on LLPs and partnership firms. The expansion aims to ensure that entities with substantial profits pay a minimum tax, closing tax loopholes. While intended to enhance government revenue, this move has raised concerns within the business community. LLPs and partnerships, particularly in sectors with thin margins, could face financial strain. The Finance Ministry argues that the move promotes tax equity and ensures all businesses contribute fairly. Industry representatives are urging reconsideration of the bill's provisions to prevent adverse impacts on small and medium-sized enterprises. This debate underscores the ongoing tension between tax fairness and business viability.