Minimum Alternate Tax articles

New Corporate Taxation regime (Section 115BAA) & MAT

Section 115BAA was introduced by way of a mid year budget in FY 2019-20 and is applicable to certain domestic companies from 1st April 2020. The new section gives a one-time option to Domestic Companies to pay tax on their taxable income at 22% (instead of 25%/30%) and additional surcharge of 10% irrespective of taxable […]...

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Posted Under: Income Tax |

Minimum Alternate Tax (MAT) for Ind AS 115 complaint companies

1. The Finance Act, 2017 amended section 115JB of Income-tax Act, 1961 to provide the framework for computation of book profit for Ind AS complaint companies in the year of adoption and thereafter i.e. to rationalize the provisions of the section in line with Ind AS (Note: Ind AS and not Ind ASs) by inserting […]...

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Posted Under: Income Tax |

Minimum Alternate Tax (MAT) | Section 115JB | Income Tax Act 1961

Law makers observed that there is many companies which are disclosing massive profit in the accounts as laid in the Annual General Meeting (AGM) before the shareholder but at the same time these companies also showing profit nil or bit above nil for the income tax purpose....

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Ind AS Accounting for foregoing MAT Credit pursuant to Section 115BAA

Consider a situation where RST Limited was a loss making company. Ind ASs were adopted by this company from the year 2016-17. Since FY 2014-15 it has started to profits it was having accumulated MAT credit of Rs. xyz crores lying in the books of accounts as on 31.03.2019....

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Posted Under: Income Tax |

Minimum Alternate Tax & Alternate Minimum Tax- Provisions

Article summarizes the provisions of Minimum Alternate Tax (MAT) and Alternate Minimum Tax (AMT). The article gives theoretical insights along with examples for sound understanding of the provisions. ...

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Posted Under: Income Tax |

Minimum Alternate Tax (MAT) & Alternate Minimum Tax (AMT)

MAT stands for Minimum Alternate Tax and AMT stands for Alternate Minimum Tax. Initially the concept of MAT was introduced for companies and progressively it has been made applicable to all other taxpayers in the form of AMT. In this part you can gain knowledge about various provisions relating to MAT and AMT. First of all we will underst...

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Posted Under: Income Tax | ,

Unabsorbed Depreciation & MAT Credit under Vivad Se Vishwas Scheme

The taxpayers will therefore have to weigh their options carefully before opting for settling their disputes pertaining to reduction in loss/unabsorbed depreciation or MAT credit. Every permutation and combination ought to be examined to determine whether it is advisable to avail the scheme or litigate the matter....

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Posted Under: Income Tax |

Section 115BAA- Concessional Tax Rate for Domestic Company

New section 115BAA has been inserted by CBDT through the Taxation Law (Amendment) Act, 2019, providing for concessional rate of tax subject to the conditions as mentioned in succeeding paragraph and exemption from minimum alternate tax (MAT) in respect of domestic companies (any domestic company) with effect from A.Y. 2020-21(FY 2019-20)....

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Posted Under: Income Tax |

AMT Provisions under Income Tax Act 1961 (AY 2020-21)

Article explains what is Alternate Minimum Tax (AMT), When to Apply AMT and its rate , Need  For AMT, Applicability of Alternate Minimum Tax (AMT), Non Applicability of Alternate Minimum Tax (AMT), Rate of AMT, Credit & carry Forward of AMT, Some Key Points related to AMT  and calculation of AMT with the help of example....

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Posted Under: Income Tax | ,

Section 80IBA of Income Tax Act with Alternate Minimum Tax

Where the gross total income of an assessee includes any profits and gains derived from the business of developing and building housing projects, there shall, subject to the provisions of this section, be allowed, a deduction of an amount equal to hundred per cent (100%) of the profits and gains derived from such business....

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Posted Under: Income Tax |

Applicability of MAT under Section 115JB on Foreign Companies

MAT is applicable to all companies including foreign companies but excluding following foreign companies. a) Foreign Company incorporated in country outside India or territory outside India and India has Double Tax Avoidance Agreement (DTAA) with that countries and such Foreign Companies does not have any Permanent Establishment in India....

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Posted Under: Income Tax |

Understanding Section 115JB of Income Tax Act (Minimum Alternate Tax)

Income Tax Act as well as Companies Act both governs companies, and company needs to provide their Income Statement (Profit and Loss Account) and Balance Sheet to the Income Tax department while Preparing Tax Returns and also Final accounts are to be audited and submitted as Annual Returns under Companies Act....

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Posted Under: Income Tax |

Quarterly financial results – impact of reduced Income tax rates

a) How to compute the tax charge – current tax and deferred tax charge for the current quarter ending 30 Sep 2019 – Q2 (under the revised rate structure)? b) Will the tax charge for the preceding quarter ended 30 June 2019 (calculated under the then applicable income tax rate – base rate of 30%) need to be restated/revised for th...

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Posted Under: Income Tax |

Updates on CBDT Circular on MAT Credit entitlement

Clarification on option exercised under Section 115BAA of Income Tax Act, 1961 (Income Tax Circular No. 29/2019 dated 2nd October, 2019 Section 115BAA provides that any Domestic Company, at its option, may pay tax at a lower rate of 22% from AY 2020-21 subject to conditions. This option is to be exercised before the due […]...

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Posted Under: Income Tax |

Strategic Analysis of amended Corporate Tax Rate Regime

The Taxation Laws (Amendment) Ordinance, 2019 has been promulgated by President of India on 20th September, 2019 with a view to amend Income Tax Act, 1961 and Finance Act (No. 2), 2019. The ordinance intends to provide impetus to the growth amidst the ostensible slowdown. Highlights of the said ordinance include: 1. Reduction of corporate...

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Posted Under: Income Tax |

CBDT circular on MAT: Can it be claimed if Opting For Lower Rate?

CBDT vide Circular 29/2019 dated 2nd October, 2019 has clarified that Companies opting for lower tax rates as per Section 115BAA will have to forego any MAT Credit Entitlement. However such Circulars are binding over Assessing Officers and not on assessees. Thus option to take a different stand is still possible for assessees although cha...

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Posted Under: Income Tax |

MAT Credit Clarification issued by CBDT – Impact Assessment

The Central Board of Income taxes, vide Circular No. 29/2019 dated 2nd October 2019 have issued clarification on the usability of the Minimum Alternate Taxes (MAT), subsequent to the issue of the Taxation Laws (Amendment) Ordinance, 2019. The Amendment Ordinance, had provided an option to the existing domestic company of paying tax at red...

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Posted Under: Income Tax |

Set off of MAT credit against Total Income computed U/s. 115BAA

The Taxation Laws (Amendment) ordinance 2019 introduced the following New Section 115BAA and Section 115BAB. Section 115BAA is applicable for existing companies, Section 115BAB is applicable for companies formed on or after1st October 2019. Both the New sections did not permit the assesses to avail the benefits / incentives available in S...

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Posted Under: Income Tax |

Corporate tax Dandiya between Corporates taxpayers, enjoy it!

inance Minister introduced amendments in Income Tax to boost economy. Corporate tax Dandiya ground is of Income Tax, the players are corporate taxpayers. The music is being played to boost economy. The Corporate tax Dandiya is for coporate tax payers only and no passes are given to non-corporate taxpayers i.e. it is not applicable to indi...

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Posted Under: Income Tax |

MAT Credit Entitlement for Companies opting for lower Tax regime

Government has brought in the Taxation Laws (Amendment) Ordinance, 2019 and announces major relief in corporate tax for domestic companies, in order to boost the Make in India initiative. Corporate tax reduced to 22% (Effective Tax Rate 25.17% inclusive of Surcharge and Cess) for domestic companies while for new manufacturing companies, ...

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Posted Under: Income Tax |

Taxation Laws (Amendment) Ordinance, 2019 – Key Changes

HIGHLIGHTS OF THE TAXATION LAWS (AMENDMENT) ORDINANCE, 2019 The President has promulgated an Ordinance dated 20 September, 2019 to amend the Income-tax Act, 1961 and the Finance (No.2) Act, 2019. The Ordinance promulgated is THE TAXATION LAWS (AMENDMENT) ORDINANCE, 2019, hereafter referred to as “the Ordinance”. The Ordinance shall co...

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Posted Under: Income Tax |

Tax implication of Taxation Laws (Amendment) Ordinance, 2019

Analysis of tax implication on ‘The Taxation Laws (Amendment) Ordinance, 2019 dated 20th September, 2019 The CBDT has introduced new section , Sec. 115BAA – Tax on income of certain domestic companies where at the option of the assessee, may compute tax @ 22% plus surcharge and cess (effective tax rate comes to 25.17%) from the [&hel...

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Posted Under: Income Tax |

Recent Income Tax Changes by Taxation Laws (Amendment) Ordinance, 2019

DIRECT TAX HIGHLIGHTS Benefits have been announced by Finance Minister in order to boost the economy. A gist on them has been provided below for your ease of reference: For Existing Domestic Companies Reduce the Corporate tax rate for Domestic Companies from 30% to 22% (excluding surcharge & cess) subject to the condition that they [&...

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Posted Under: Income Tax |

Taxation Laws (Amendment) Ordinance, 2019 – Analysis

The, TAXATION LAWS (AMENDMENT) ORDINANCE, 2019 (hereinafter 'Ordinance'), is an ordinance to further amend the Income-tax Act, 1961 and the Finance (No.2) Act, 2019. Since the parliament is not in session and the President of India is satisfied that circumstances exist which render it necessary for him to take immediate action, this Ordin...

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Posted Under: Income Tax |

Bench marking of Most Appropriate Option for Taxation of Domestic Companies

Government has brought in the Taxation Laws (Amendment) Ordinance 2019 and announces major relief in corporate tax for domestic companies, in order to boost the Make in India initiative. Corporate tax reduced to 22% (Effective Tax Rate 25.17% inclusive of Surcharge and Cess) for domestic firms while for new manufacturing companies, tax ra...

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Posted Under: Income Tax |

Major highlights of Recent Changes in Income Tax and GST

‘Acche din’ back for Indian Economy after recent Recent Reliefs in Income Tax and GST? In yet another surgical strike on bears and negative sentiments of the economy, the FM has tried to create an environment of surplus in the hands of corporates for making investments and ease their liquidity concerns. The Taxation laws (Amen...

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Posted Under: Income Tax |

Analysis on recent reduction of Corporate Tax rates

Analysis on reduction of Corporate Tax vide  Taxation Laws (Amendment) Ordinance, 2019 1. The Government of India announced reduction in corporate tax rates for domestic companies in India with effect from F.Y. 2019-20. 2. A new section 115BAA has been inserted to reduce tax rate of 22% (excluding surcharge and education cess) for domest...

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Posted Under: Income Tax |

A Renaissance for tax regime | Taxation Laws (Amendment) Ordinance 2019

The Government passed Taxation Laws (Amendment) Ordinance 2019 to make certain amendments in the Income-tax Act 1961 and the Finance (No. 2) Act 2019. Below are a few impact areas that the companies and investors will need to revaluate:...

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Posted Under: Income Tax |

Computation of book profit & MAT credit U/S 115JB

The Minimum Alternative Tax (MAT) is a provision introduced in direct tax laws to limit the tax deductions/exemptions otherwise available to taxpayers so that they pay a 'minimum' amount of tax to the government....

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Posted Under: Income Tax |

Analysis of Taxation Laws (Amendment) Ordinance 2019 

Taxation Laws (Amendment) Ordinance 2019  – Income Tax Amendment – 2019 September You have to go through tough situations to get better. As a bold step to revive the current Indian economy, the Finance Minister announced various amendments in the form of reduced tax rate and incentives in the Income tax act. These changes have [&...

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Posted Under: Income Tax |

Decoding Taxation Laws (Amendment) Ordinance 2019

On September 20, 2019 Government of India on its Gazette Published an The Taxation Laws (Amendment) Ordinance 2019 to amend and add few sections in Income Tax Act 1961 which is expected to give a very necessary First Aid to otherwise bruised economy. 1. Insertion of two new sections ( 115BAA and 115BAB) i. Section […]...

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Posted Under: Income Tax |

Opting for Section 115BAA, have you lost your MAT Credit Entitlement?

Taxation Laws (Amendment) Ordinance, 2019 has brought favourable amendments for corporates. However one amendment has taken the Industry to a dilemma. The dilemma is whether MAT credit entitlement available will be allowed to those opting for favourable rate under Section 115BAA. Section 115JB(5A) has been amended to provide that provisi...

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Posted Under: Income Tax |

Important points of Taxation Laws (Amendment) Ordinance, 2019

Important pointers of The Taxation Laws (Amendment) Ordinance, 2019 1) For existing Companies – (Whether Manufacturing or not) a. Rate of tax – 22% + applicable surcharge and cess b. Conditions – Have not availed any deduction under i. Additional allowance on scientific research, ii. Section 32AD, 32AB, 35CCC, 35CCD iii. Additional ...

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Posted Under: Income Tax |

Guide to Minimum Alternate Tax (MAT) for Ind AS Compliant Companies

Author has examined the amended provisions of MAT under 115JB of Income Tax Act, 1961, as applicable to Companies following Ind AS for preparation of their Financial Statements. Illustrations have been given for a better clarity on practical application the provisions....

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Posted Under: Income Tax |

Alternate Minimum Tax For Non Corporate Assessee

Alternate minimum tax means the Amount of tax computed on the adjusted total income.AMT is a way collecting the minimum tax from the tax payers. Assessee shall be liable to pay tax on such income at a rate eighteen and one-half per cent (18.5%).It is not an additional tax levied on the taxpayer....

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Posted Under: Income Tax |

Alternate Minimum Tax – Section 115JC

The Alternate Minimum Tax (AMT) is income tax imposed by the United States federal government on individuals, corporations, estates and trusts. The AMT was enacted in 1982....

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Posted Under: Income Tax |

Issues – Minimum Alternate Tax (MAT) – Section 115JB

Section 115JB was inserted by the Finance Act, 2000, w.e.f. 01/04/2001. It had replaced Section 115JA, which was inserted by the Finance Act, 1996 w.e.f. 01/04/1997. Section 115JA was replacement of earlier Section 115J, which was inserted by the Finance Act, 1987 w.e.f. 01/04/1988. The objective and philosophy of the provisions of Sectio...

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Posted Under: Income Tax |

Minimum Alternative Tax (MAT)- Meaning, Applicability & Brief Provisions

MAT stands for Minimum Alternate Tax and AMT stands for Alternate Minimum Tax. Initially the concept of MAT was introduced for companies and progressively it has been made applicable to all other taxpayers in the form of AMT....

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Posted Under: Income Tax |

Relief from MAT liability to companies under corporate insolvency

It is proposed to amend section 115JB to provide that the aggregate amount of unabsorbed depreciation and loss brought forward (excluding unabsorbed depreciation) shall be allowed to be reduced from the book profit, if a company’s application for corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 has ...

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Posted Under: Income Tax |

MAThematical puzzles!

Minimum Alternate Tax, though on the statute since practically 3 decades now, has always been a subject matter of controversy. Even after all the amendments to it over the years, most recently to align it with the Ind-AS provisions, there is still room for filling in certain gaps. This article seeks to raise certain concerns, which, hopef...

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Minimum Alternate Tax (MAT) on Ind AS Compliant Companies

The computation of MAT for the year in which first time adoption of Ind AS has been taken place will include, apart from current year adjustments, the adjustments which are made in the preceding financial year as well as on the transition date....

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Posted Under: Income Tax |

Ind AS and corresponding impact of MAT computations – tracking the evolution

Sandeep Dasgupta & Risha Gandhi IFRS adoption in India: With globalization of businesses and imminently increasing need for transparent, comparable financial information across markets, the International Accounting Standards Board (IASB) embarked on developing, a single set of high quality, understandable and enforceable global accoun...

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Posted Under: Income Tax |

Payment of tax by certain companies U/s. 115JB- CAG Report

Several companies that were having large profit from business and distributing substantial portion of the income to their shareholders as dividend, were reducing their tax liability by availing various deductions and exemptions available in the Act. ...

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Posted Under: Income Tax |

Accounting of convertible instruments under Ind-AS and its MAT impact

The year ending 31 March, 2017, witnessed many companies preparing their financial statements as per the Indian Accounting Standards (‘Ind-AS’) for the first time. Ind-AS is a set of accounting standards that converge with the International Financial Reporting Standards (‘IFRS’) and require companies to adopt fair value accounting...

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Posted Under: Income Tax |

MAT impact on financials under IND AS

1. Background With companies having net worth exceeding INR 500 crores required to converge their financials with the Indian Accounting Standards (IND AS) for financial years beginning on or after 1 April, 2016, the Minimum Alternate Tax (MAT) implications for section 115JB of the Income Tax Act, 1961 (ITA) were a big mystery. The Finance...

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Posted Under: Income Tax |

Remove proposed restriction on carry forward of MAT/ AMT credit: ICAI

Section 115JAA(2A) - Restriction on carry forward of MAT/AMT credit and claim of FTC in relation to taxes under dispute - Restriction to be removed...

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Carry forward & set off of MAT credit where ten year period has expired on or before AY 2016-17

Clarity regarding carry forward and set off of MAT credit in cases where the ten year period has expired on or before AY 2016-17 but the fifteen year period has still not expired needed....

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Posted Under: Income Tax |

Treatment of IND AS Adjustments under MAT

Financials for FY 2016-17 will be prepared as per IND AS and the presentation will be done as per Division II of Schedule III as per Companies Act 013. The computation of book profit under MAT depends on accounting profit. The financial have become complex due to initial impact of IND AS and recurring impact due to adoption of IND AS...

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Posted Under: Income Tax |

Budget 2017 Rationalises MAT Provisions with Ind-AS

Central Government notified the Indian Accounting Standards (Ind AS) which are converged with International Financial Reporting Standards(IFRS) and prescribed the Companies( Indian Accounting Standards) Rules, 2015 which laid down a roadmap for implementation of these Ind AS....

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Posted Under: Income Tax |

Budget proposes carry forward of MAT / AMT credit for 15 Years

With a view to provide relief to the assessees paying MAT, it is proposed to amend section 115JAA to provide that the tax credit determined under this section can be carried forward up to fifteenth assessment years immediately succeeding the assessment years in which such tax credit becomes allowable....

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Posted Under: Income Tax |

Computation of Book Profit for Ind AS Compliant Companies

Central Board of Direct Taxes (CBDT) constituted MAT- Ind AS Committee to suggest framework for computation of book profit for purposes of levy of Minimum Alternate Tax (MAT) under Section 115JB of the Income-tax Act, 1961 for Indian Accounting Standards (Ind AS) compliant companies in the year of adoption and thereafter....

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Posted Under: Income Tax |

Implementation of Ind AS & its impact on calculation of MAT

From the FY 2016-17 Ind AS will be in place and have a big impact on the Financial Statement i.e. Net Profit of the company. Calculation of MAT depends upon the Net Profit as per the Books of Accounts after certain adjustments as defined in Section 115JB. So it can be derived that the adoption of Ind AS, the MAT liability of a company can...

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Posted Under: Income Tax |

Section 115JB OF Income Tax Act, 1961(After Budget 2016)

Section 115JB is nothing but the Minimum Tax that a company is required to pay. This section provides that in case the tax payable by a company is less than 18.5 % of its books profit in any assessment year beginning from 01.04.2012, then such book profit will be assumed to be the income of the company and tax payable by the company durin...

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Posted Under: Income Tax |

Analysis of draft rules for grant of Foreign Tax Credit

A resident assessee will be eligible to claim Foreign Tax Credit (FTC) if any tax has been paid by him in a country or specified territory outside India. Grant of FTC shall be allowed only in the year in which the income corresponding to such tax has been offered to tax or assessed to tax in India....

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Posted Under: Income Tax |

No MAT on foreign companies for the period after to 01.04.2001

Under the existing provisions contained in sub-section (1) of the 11 5JB in case of a company, if the tax payable on the total income as computed under the Income-tax Act, is less than eighteen and one-half per cent of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable by the asses...

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Posted Under: Income Tax |

Whether MAT applicable to share of a company in income of a joint venture business

Of late, we have been witnessing a new and different trend in relation to the real estate development. Earlier, a builder would go for outright purchase of a piece of land from the landlord and develop the same at his own cost and risk. The scenario in this regard is undergoing a change. Now the landlord also desires to have a share in th...

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Posted Under: Income Tax |

MAT u/s 115JB – no more a complete code?

1. There were (are?) companies which used to report huge profits and distributing huge dividends and at the same time paying very small tax liability using the provisions of the Act. 2. To curb the above practices, MAT on book profit was introduced which was chargeable on reported profits with effect from 1-4-1988 with section 115J. MAT -...

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Posted Under: Income Tax |

Article on Alternate Minimum Tax – Section 115JC

1. Applicability All assesses except companies are liable to pay AMT if the tax payable under the normal provisions of income tax is lesser than AMT. In simple words, Tax payable under income tax < AMT However AMT is not payable by:- Individual HUF AOP/BOI Artificial Juridical person If the ADJUSTED TOTAL INCOME* OF SUCH […]...

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Posted Under: Income Tax |

Do we have any tangible benefit of incorporating LLP, other than some cost saving and reduction of compliance?

Answer is yes, we do have. After introduction of Alternate Minimum Tax (hereinafter referred as the ‘AMT’) by Finance Act 2012 on ‘Limited Liabilities Partnership’ (hereinafter referred as the ‘LLP’) also many professional/corporate/promoters has dispensed with an idea for formation of LLP, as after ame...

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MAT: Retrospective Tax Is Back?

Finance Minister Arun Jaitley on 30 April 2015 said that capital gains made by foreign investors will be exempt from Minimum Alternate Tax (MAT), but did not provide relief for past liabilities. ...

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Applicability of MAT on FIIs: A Hot Potato

Bipluv Jhingan and Amitav Singh INTRODUCTION Despite the upbeat promises made by the Hon’ble Finance Minister with regards to taxation of foreign investors, Foreign Institutional Investors (now rechristened as Foreign Portfolio Investors) still seem to be stuck in the Minimum Alternate Tax (MAT) conundrum. The new budget seeks to levy M...

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Posted Under: Income Tax |

MAT / Book Profit- Exclusion of Share of Profit from AOP & Capital Gain of FII

Rationalising the provisions of section 115JB The existing provisions contained in section 115JB of the Act provide that in the case of a company, if the tax payable on the total income as computed under the Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day […]...

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Posted Under: Income Tax |

If Assessee is taxed under ‘MAT’ to ‘MAT’ – No Escapement, No Reopening

The AO is empowered to assess or reassess the total income of the Assessee by reopening the Assessment, invoking the provisions of section 148 of the Act. The authors have visualized in-depth manifestation with respect to the jurisdiction of the AO in reopening the Assessments of the ‘Companies’ where even after the reopening the ulti...

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Amendment in Condition for Claiming Credit of Alternate Minimum Tax

The existing provisions of sub-section (1) of section 115JEE of the Act provide that the provisions of Chapter-XI I BA shall be applicable to any person who has claimed a deduction under part C of Chapter VI-A or claimed a deduction u/s 1 0AA. Further the present provisions of sub-section (2) of section 1 15JEE […]...

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Section 115J, 115JA & 115JB may ultra vires Constitution of India & Income-tax Act, 1961

CA Dev Kumar Kothari Section 115J, 115JA and 115JB may be ultra vires the Constitution of India and the Income-tax Act,1961 – a study with reference to some very weakly prepared and contested cases about validity of provision for tax on book profit / minimum alternate tax (MAT) and some suggestions for tax payers and […]...

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Alternate Minimum Tax (AMT) on all persons other than companies

Vide the Finance Bill, 2012, the heading of Chapter XII-BA regarding alternate minimum tax (AMT), in respect of persons other than a company, has been substituted by the words ‘Persons other than a company’, in place of the words ‘Limited liability partnerships’. As per amendment of the aforesaid Chapter, provisions of AMT have b...

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Posted Under: Income Tax |

S.115JB P/L a/c prepared under regulatory Acts to be basis for computing book profit for insurance,banking,electricity company

As per section 115JB, every company is required to prepare its accounts as per Schedule VI of the Companies Act, 1956. However, as per the provisions of the Companies Act, 1956, certain companies, e.g. insurance, banking or electricity company, are allowed to prepare their profit and loss account in accordance with the provisions specifie...

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Posted Under: Income Tax |

MAT Payble on Gain from disposal of revalued asset even if Gain not credited to P/L a/c

It is, proposed to amend section 115JB to provide that the book profit for the purpose of section 115JB shall be increased by the amount standing in the revaluation reserve relating to the revalued asset which has been retired or disposed, if the same is not credited to the profit and loss account. ...

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Alternate Minimum Tax (AMT) on all persons other than companies

Under the existing provisions of the Income-tax Act, Minimum Alternate Tax (MAT) and Alternate Minimum Tax (AMT) are levied on companies and limited liability partnerships (LLPs) respectively. However, no such tax is levied on the other form of business organisations such as partnership firms, sole proprietorship, association of persons, ...

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Budget 2011-12 – Minimum Alternate Tax Rate (MAT) increased marginally

Minimum Alternate Tax :- Under the existing provisions of section 115JB(1), a company is required to pay a minimum alternate tax (MAT) on its book profit, if the income-tax payable on the total income, as computed under the Act in respect of any previous year relevant to the assessment year commencing on or after 1st April, 2011, is less ...

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Posted Under: Income Tax |

MAT is no more minimum alternate tax

When the first draft of the Direct Taxes Code (DTC) was released in August 2009, the provision dealing with Minimum Alternate Tax (MAT) was one of the most discussed and deliberated provision. It proposed to levy tax on the gross value of assets. There were certain drawbacks and limitations which were pointed out to the government, as a r...

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Posted Under: Income Tax |

DTC Bill 2010 exempts companies converting into LLP from Minimum Alternate Tax and Dividend Distribution Tax

Chapter V of the Direct Taxes Code (DTC) seeks to levy a tax of 20 per cent on the book profits of every company. Profits of the company have to be prepared in the prescribed form in accordance with the provisions of parts II and III of Schedule VI t...

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Posted Under: Income Tax |

Minimum Alternate Tax provisions for A.Y. 2010-11 & A.Y. 2011-12

In the case of companies, if tax payable on its total income as computed under the I.T. Act, 1961 in respect of any previous years, is less than 15% (for assessment year 2010-11 and 18% from assessment year 2011-12) of its "book profit", then such book profit shall be deemed to be the total income of the company and tax shall be payable a...

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Suggestions of the ICAI on the Revised Discussion Paper on the Direct Taxes Code

A Revised Discussion Paper (RDP) on Direct Taxes Code (DTC) has been released by the CBDT on 15th June, 2010, taking into consideration the vital and critical issues raised by the various stakeholders on the DTC. It is extremely satisfying to note that six of the eleven significant issues identified in the RDP are as per the specific sugg...

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Budget 2010: Direct and Indirect Tax Proposals for Oil and gas Sector

Last year's budget had introduced an investment linked tax incentive for specified business including the business of laying and operating a cross country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of such network. One condition for availing this benefit was...

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Direct tax code lack the focus on development

The tax code comes in the economic background of over 400 million people being below the poverty line; with many areas disturbed due to underdevelopment; sustained policies of inclusive growth having reduced the poverty ratio but not absolute numbers; and a huge lack of infrastructure....

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MAT provisions under direct tax code and its impact on tax liability

MAT – Making Companies slim Ms. Kareena Kapoor style Introduction: 1.0 The objective of new Direct Tax Code (DTC) as stated in the Discussion Paper (DP) published are broadening the base, minimize exemptions, horizontal and vertical equity etc. Since the proposed DTC touches all the aspects of taxation of income of all the types of [&he...

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Accounting and Provisions of Minimum Alternate Tax (MAT)

Chapter XIIB of the Income Tax Act, 1961 covers Minimum Alternate Tax U/s. 115JB, which covers cases under ‘Special Provision for Payment of tax by certain companies’.. The relevant extract of this section is produced below:...

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Income tax rates proposed in DTC for Partnership Firm, LLP, Foreign Companies, Domestic Companies, Individual and HUF

For Individuals and Hindu Undivided family The code proposes to exempt the general tax payer from paying income tax if his income is Rs 1,60,000 in a year. He would pay just zero tax till an income of Rs 1,60,000 per year. From income above Rs 1,60,000 till Rs 10 lakh (Rs 1 million), he […]...

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Posted Under: Income Tax |

Major Changes / Amendments in Income Tax and Wealth-tax Made in Budget 2009-2010

No changes made in the Corporate Tax rates. For the Limited Liability Partnerships, the provisions of Income Tax are the same as applicable in the case of Partnership Firms formed as per the Indian Partnership Act’ 1932....

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Claim of depreciation as per I.T. Rules, for computation of book profit/ MAT Calculation U/s. 115JB

Under the provisions of section 115JB of the Income-Tax Act, 1961 (the Act), where in the case of a company, the income-tax payable on the total income in respect of any assessment year (AY), is less than ten percent of its book profit, such book profit shall be deemed to be the total income of the assessee and tax payable by the assessee...

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Posted Under: Income Tax |

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