Section 115JD – Tax Credit in case of succession

Issue/Justification

Section 115JD provides for tax credit in respect of alternate minimum tax. The provisions of section 115JC are applicable to persons other than a company i.e. individual, HUF, Partnership firm including LLPs, AOPs etc. In this era of growth, the possibility of reorganisation of the assessee liable to pay AMT cannot be ruled out. A proprietor ship firm eligible to claim credit under section 115JD can convert itself into a Partnership firm or a LLP or AOP or any other person. However, as per the present provisions, once it will convert itself, the successor shall not be liable to claim AMT credit.

Suggestion

It is suggested that Section 115JD be amended to allow carry forward of AMT credit in the hands of the successor entity for remaining/unexpired period of credit.

Source-  ICAI Pre-Budget Memorandum–2018 (Direct Taxes and International Tax)

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