Income Tax : Redundancy of Minimum Alternate Tax (MAT) in India's evolving tax landscape, focusing on its history, challenges & potential simpl...
Income Tax : Unveiling the intricacies of Minimum Alternate Tax (MAT) in India. Understand its purpose, computation, and recent developments. N...
Income Tax : MAT credit should be accounted in books as it satisfies definition of Asset as per Framework for preparation and presentation of F...
Income Tax : MAT stands for Minimum Alternate Tax and AMT stands for Alternate Minimum Tax. Initially the concept of MAT was introduced for com...
Company Law : MAT or minimum alternative tax refers to a tax paid to by a company in advance. We should note that companies must pay tax accordi...
Income Tax : In order to attract fresh investment in manufacturing and provide boost to 'Make-in India' initiative of the Government, another p...
Income Tax : The computation of book profit under section 115JB is a complicated and vexed issue with diverse interpretations possible on vario...
Income Tax : Relaxation in the provisions relating to levy of Minimum Alternate Tax (MAT) in case of companies against whom an application for ...
Income Tax : Relevant part of MAT-Ind AS Committee Report dated 17th June, 2017 containing recommendations regarding amendment to the provision...
Income Tax : Apex Industry body ASSOCHAM has advocated continuation of the exemption from MAT (Minimum Alternative Tax) by the insertion of a s...
Income Tax : The Supreme Court examined tax issues in Apollo Tyres Ltd. vs. CIT, including the role of assessing officers under Section 115-J a...
Income Tax : ITAT Chennai held that as capital profit are to be excluded while computing book profit u/s 115JB, similarly, the adjustment of lo...
Income Tax : ITAT Delhi held that penalty u/s 271(1)(c) of the Income Tax Act alleging inaccurate particulars not leviable as assessee was subj...
Income Tax : ITAT held that if advances received by the assessee from customers on which TDS Credits has been claimed, has been offered as inco...
Income Tax : PCIT-4 Vs Krishi Rasayan Exports Pvt. Ltd (Calcutta High Court) Whether the interest subsidy and excise refund would be treated as...
Income Tax : Representations have been received from the stakeholders seeking clarification on following issues relating to exercise of option ...
Income Tax : Details of the amount required to be increased or decreased in accordance with sub-section (2A) of section 115JB- [Applicable only...
Income Tax : Clarifications with FAQs on computation of book profit for the purposes of levy of Minimum Alternate Tax (MAT) under section 115JB...
Income Tax : CBDT press release on Issues arising from the implementation of Minimum Alternate Tax (MAT) provisions relating to Indian Accounti...
Income Tax : References are being received by the Board that in certain cases appellate authorities are dismissing appeals without going into t...
Therefore, it emerges that MAT payable u/s 115JB is only income tax and does not include surcharge or education cess. Therefore, if only income tax is paid under the provisions of section 115JB it is natural that tax credit u/s 115JAA will only be of income tax and not of surcharge and education cess.
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 been made applicable to all persons other than companies
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 specified in their regulatory Acts. In order to align the provisions of Income-tax Act with the Companies Act, 1956, it is proposed to amend section 115JB to provide that the companies which are not required under section 211 of the Companies Act to prepare their profit and loss account in accordance with the Schedule VI of the Companies Act, 1956, profit and loss account prepared in accordance with the provisions of their regulatory Acts shall be taken as a basis for computing the book profit under section 115JB.
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.
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, etc.
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 than the MAT. The amount of tax paid under the said section is allowed to be carried forward and set off against tax payable up to the tenth assessment year immediately succeeding the assessment year in which the tax credit becomes allowable under the provisions of section 115JAA.
ADIT (Int. Tax) v. Bank International Indonesia – ITAT held that provision made for doubtful debts will be required to be added back to the net profit as per the profit and loss account while computing the Book Profit for the purpose of determination of Minimum Alternate Tax , subsequent to the amendment to Explanation 1 to section 115JB of the Income-tax Act, 1961 , with retrospective effect from 1 April, 2001.
Recently in the case of Krung Thai Bank PCL v. Jt Director of Income-tax – International Taxation (ITA No. 3390/Mum/2009) (Mum), the Mumbai bench of the Income-tax Appellate Tribunal (the Tribunal) held that the provisions of Section 11 5JB of the Income-tax Act, 1961 (the Act) pertaining to Minimum Alternate Tax (MAT) would come into play only when the tax payer is required to prepare its profit and loss account in accordance with the provisions of Part II and III of Schedule VI of the Companies Act. Further, since banking companies are not required to prepare their financial statements as per Schedule VI to the Companies Act in view of the exemption set out under proviso to Section 211 (2) of the Companies Act, the tribunal held that the provisions of Section 11 5JB of the Act cannot be applied to a banking company.
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 result of which, the government decided to reinstate the earlier regime of levying MAT on book profits. However, after reading the proposed MAT provision in conjunction with the entire code, one is left wondering whether it will turn out to be a boon or a bane to taxpayers in India.
Authority for Advance Rulings (AAR) concluded that gains derived from the transfer of shares by a Mauritius company to its wholly owned subsidiary in India would not be taxable in India under the Indian Income Tax Act (ITA), nor would such gains be subject to the Minimum Alternate Tax (MAT) (Praxair Pacific Limited (A.A.R. No. 855/2009)). The AAR further clarified that benefits under the India-Mauritius tax treaty would be available to the Mauritius Company.
