Tax Credit u/s 115JAA & 115JD read with section 115JB & 115JC
Issue/Justification
Minimum Alternate tax and Alternate Minimum tax is paid u/s 115JB &115JC of the Act respectively. The amount of tax credit so determined under section 115JAA and 115JD is carried forward and set off in accordance with the provisions of these sections but such carry forward is not allowed beyond 15th assessment year immediately succeeding the assessment year for which tax credit becomes available.
In case of an assessee who is eligible to claim the exemption u/s 10A to 10C or deduction u/s 80-IA to 80-IE, the said amount of tax credit is eligible for set off only after the expiry of the 10th Assessment year (in most cases) in which such exemption and deduction is allowed respectively. However, in effect the purpose of making available the tax credit gets defeated, as tax credit is not utilized by those companies up to 10 assessment years and carry forward of the Income tax paid on book profit under this section, is not allowed to be set off beyond 15th assessment year immediately succeeding the assessment year for which tax credit become available.
Suggestion
It is suggested that for setting off of MAT credit, a fresh period of 10 years be allowed after the completion of period of exemption under section 10A to 10C and deduction under section 80-IA to 80-IE under normal provisions of the Act provided it is the exclusive business of the assessee.
(SUGGESTIONS FOR RATIONALIZATION OF THE PROVISIONS OF DIRECT TAX LAWS)
