A sizeable cross-section of Corporate India will likely opt out of the regime of 22% headline tax rate, as the government on Wednesday made it clear that those switching to the new dispensation can’t avail of their accumulated minimum alternate tax (MAT) credit. Companies taking MAT credits as assets will have to now write these off and take a big hit on profits if they adopt the new regime, negating the recent tax cuts’ purpose of boosting the cash flows of firms and encouraging them to invest. According to tax experts, the companies to be hit by the latest Central Board of Direct Taxes (CBDT) circular are the ones whose effective tax rates have risen in recent years, with their exemptions and incentives being phased out. These firms, including those in power, oil & gas, mining and pharmaceutical industries, used to pay MAT but over the last 2-3 years have moved to the marginal tax, with removal of tax reliefs. However, they still have huge amounts of accumulated MAT credits which can be used to mitigate the tax outgo. The denial of MAT credit for the new regime would mean the earlier dispensation would be more attractive for them.