Income Tax : The case clarifies that only specified adjustments can be made while computing book profit under MAT. The ruling limits arbitrary ...
Income Tax : The framework clarifies that companies must pay MAT where normal tax liability is lower than 15% of book profit. It establishes MA...
Income Tax : Explains mandatory filing of Form 66 for companies liable to MAT and the requirement of CA certification. Highlights consequences ...
Income Tax : Explains how taxpayers can recompute book profits and reduce MAT liability using Form 53 for APA and secondary adjustments....
Income Tax : The amendment removes MAT for additional specified non-resident businesses taxed on a presumptive basis. This ensures uniform tax ...
Corporate Law : The Budget exempts non-residents paying tax on a presumptive basis from MAT while offering targeted income tax holidays. These mea...
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 : The Tribunal set aside additions to book profit after ruling that MAT provisions do not apply to banks established under a special...
Income Tax : The SC upheld that reinsurance premiums paid to foreign entities are not taxable in India. It confirmed that absence of income acc...
Income Tax : The High Court held that reinsurance premiums paid to non-residents are not taxable in India and no TDS is required. It upheld Tri...
Income Tax : The Court held that Explanation 1(f) to Section 115JB does not expressly permit addition of Section 14A disallowance, leading to d...
Income Tax : The Tribunal held that revision under section 263 was invalid where the MAT adjustment arose mechanically from a transition amount...
Company Law : ROC Kanpur's order dated 10/10/2025 imposes a ₹175,450 penalty on Haiderpur Fertilizer Producer Company and its five directors f...
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...
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.
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
Special Economic Zones are likely to lose their sheen, with Direct Taxes Code Bill proposing to introduce minimum alternate tax at 20 per cent on the book profit of developers as well as units from April 1, 2012.
The government on Monday proposed to raise minimum alternate tax (MAT) to 20 per cent on book profits but diluted the earlier proposal to impose it on gross assets that had drawn protests from firms. MAT was introduced in fiscal 1998 to address the inequity. Many companies, despite making book profits as per their profit and loss account, were hardly paying any tax because income computed as per provisions of the Income-Tax Act, was either nil, or insignificant.
The assessee, a foreign company, without a presence or PE in India, earned long-term capital gains which were exempt u/s 10(38). The assessee applied for a ruling on whether it was liable to pay Minimum Alternate Tax (MAT) u/s 115JB on the said gains. HELD ruling in favour of the assessee:
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 at 15% (for assessment year 2010-11 and 18% from assessment year 2011-12) on such total income.
