The new Direct Tax Code, unveiled last week, proposes drastic changes in the structure of Minimum Alternate Tax (MAT), the minimum amount of tax to be paid by any company if its tax liability on total taxable income falls short of 15 per cent.

Under new norms, MAT will be charged on the company's gross assets including fixed assets, capital work-in-progress and book value of all other assets, instead of the book profits while there will be no provision of MAT credit.

Mukesh Butani, Partner, BMR Advisors, while commenting on the Code, said, "It tends to carry out not just changes in the form in which you will want to look at the income tax code but important legislative changes as well."

The Code will control asset creating spree by major companies in India. Instead, companies will concentrate on earnings and the code will encourage them to pay more dividends.

Loss making firms will also be required to pay tax. The firms with huge asset base and relatively smaller earnings will have to suffer most under new tax structure.