Minimum alternate taxation is a measure to address the growing problem of companies that declare high profits, but pay low or no taxes (‘zero-tax’ companies). Parliament has experimented with its approach to MAT since 1983 and continues to do so in the proposed Direct Tax Code. This paper charts the various changes in the MAT regime made over the years and the interpretational problems that have arisen with provisions for MAT credit, advance payment of MAT and calculation of book profits. It then considers the merits of this taxation regime with reference to the economic effects of the burden of this tax, and the attendant compliance and record-keeping costs. With this in mind, this paper argues that the MAT regime should be modified and puts forth two proposals for reform to make the corporate taxation regime clear and efficient.