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Minimum Alternate Tax (MAT)
Minimum Alternate Tax (MAT)
Articles
Background:
Section 115JB was i ntroduced in Finance Act, 2000 w.e .f. 1.4.2001,
whereby, a compa ny s hall be liable to pay higher of ta x computed under
I ncome Tax Ac t provisions and tax computed under Sec 115JB .
Applicability:
The provisions of this chapter are ap plicable only to C ompanies and not
to a ny other assess ee like I ndividual, HUF, Partnership Firm, etc.
Tax ra te applicable u/s 115JB for various assessment year s are as follows :
A.Y.2010-11 15%
Under Sec 115JB (4), every c ompany to which this section applies, shall
furnish a report in F orm 29B, as prescribed under rule 40B , from an
accountant, certifying tha t the Book Profits has been computed in
accordance with the provisions of Se c 115JB . This report has to be
accompanied with the return of income filed under Sec 139(1) or
142(1)(i ).
Sec 115JAA provides for calculation a nd carry for ward of MAT Credit in
respect of MAT pai d u/s 115JB (1) for the assessment year comme ncing on
1.4.2006 and any s ubsequent assessment year.
Working for cla iming MAT credit and carry forward of balance unutilized
MAT credit :
Year 1:
I f TP < M AT • T a x L i a b i l i t y = M AT
• M AT (C r ) c / f = M AT – T P
I f TP > M AT • T a x L i a b i l i t y = T P a s p e r I . T . Ac t
• M AT (C r ) c / f = N I L
I f TP < M AT Th e r e i s a n B o u g h t F o r w a r d M AT (C r )
• T a x L i a b i l i t y = M AT
• M AT (C r ) c / f = M AT (C r ) b / f + C u r r e n t Ye a r [ M AT – T P ]
Th e r e i s N O B o u g h t F o r w a r d M AT (C r )
• T a x L i a b i l i t y = M AT
• M AT (C r ) c / f = C u r r e n t y e a r [ M AT – T P ]
I f TP > M AT Th e r e i s a n B o u g h t F o r w a r d M AT (C r )
I f N T P < M AT
• Ad j u s t a b l e M AT (C r ) = C u r r e n t Y e a r [ T P – M AT ]
• T a x L i a b i l i t y = T P – Ad j u s t e d M AT (C r ) = C u r r e n t Y e a r M AT
• M AT (C r ) c / f = M AT (C r ) b / f – Ad j u s t e d M AT (C r )
I f N T P > M AT
• M AT (C r ) c / f = M AT (C r ) b / f
Th e r e i s N O B o u g h t F o r w a r d M AT (C r )
• T a x L i a b i l i t y = T P a s p e r I . T . Ac t
• M AT (C r ) c / f = N I L
W h er e , M AT = M i n i m um Al t e rn a t e Ta x
TP = Ta x Pa ya b l e a s p er I n c o me T a x Ac t , 1 96 1
NT P = TP – [B /f M AT c re di t ]
Annexure I:
As Increased by :
Income tax paid (including Tax on distributed profit u/s 115O, Distribution
Tax u/s 115R, education cess, surcharge and interest on income tax ) Xx
Income tax Payable or Income tax provisions Xx
Any transfer to reserve Xx
Provisions for unascertained liability Xx
Provisions for loss of subsidiary company Xx
Dividend Paid/Proposed Xx
Expenses relating to exempt income u/s 10 (other than clause 38 of Sec
10) Xx
Expenses relating to exempt income u/s 11 Xx
Expenses relating to exempt income u/s 12 Xx
Depreciation (As per Companies Act) Xx
Amount of Deffered Tax & Provision Thereof Xx
Amount or amounts set aside as provision for dimunation in value of asset Xx
(to the extent any of above is debited to P & L A/c) xx
xxx
As Reduced by :
Withdrawal from the reserve or provisions Xx
Exempt income u/s 10 (other than clause 38 of Sec 10) Xx
Exempt income u/s 11 Xx
Exempt income u/s 12 Xx
The amount of loss b/f or unabsorbed depreciation , whichever is less as
per
books of accounts Xx
Profit eligible for deduction u/s 80HHC Xx
Profit eligible for deduction u/s 80HHE Xx
Profit eligible for deduction u/s 80HHF Xx
Profit of sick industrial company Xx
Profit of tonnage Tax Company (section-115VO) Xx
Depreciation (as per Companies Act) (however excluding depreciation on
revaluation of assets) Xx
Amount withdrawn from the revaluation reserve to the extent it does not
exceed the amount of depreciation on account of revaluation of assets Xx
Amount of Deffered Tax , if credited to P & L A/c Xx
(xx)
Book Profits on which MAT is to be calculated xxx
Disclaimer :