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M.a.t. M.a.t. Presentation Transcript

  • MINIMUM ALTERNATE TAXMINIMUM ALTERNATE TAXSpecial Provisions for payment of tax by certainSpecial Provisions for payment of tax by certaincompanies S. 115JB –companies S. 115JB –(1)Notwithstanding anything contained in any other(1)Notwithstanding anything contained in any otherprovision of this Act, where in the case ofprovision of this Act, where in the case ofa co., the income tax payable on the total incomea co., the income tax payable on the total incomecomputed under this Act of any P.Y., is less thancomputed under this Act of any P.Y., is less than18.5% of its book profit, such book profit shall be18.5% of its book profit, such book profit shall bedeemed to be its total income and it shall paydeemed to be its total income and it shall payincome-tax @ 18.5% on such total income.income-tax @ 18.5% on such total income.
  • (2) Every co. shall prepare its P/L A/c. for the(2) Every co. shall prepare its P/L A/c. for therelevant P. Y. as per the provisions of Parts II andrelevant P. Y. as per the provisions of Parts II andIII of Schedule VI to the Cos. Act, 1956.III of Schedule VI to the Cos. Act, 1956.While preparing the annual a/c.s including P/LWhile preparing the annual a/c.s including P/LA/c. –A/c. –(i) the accounting policies, (ii) the accounting(i) the accounting policies, (ii) the accountingstandards adopted for preparing such a/c.sstandards adopted for preparing such a/c.sincluding P/L A/c. and (iii) the method and ratesincluding P/L A/c. and (iii) the method and ratesof depreciation, shall be the same as have beenof depreciation, shall be the same as have beenadopted for preparing such a/c.s including P/Ladopted for preparing such a/c.s including P/LA/c. laid before the A.G.M. of the co., as per S.A/c. laid before the A.G.M. of the co., as per S.210 of the Cos. Act, 1956.210 of the Cos. Act, 1956.
  • Where the co., has adopted F. Y. under theWhere the co., has adopted F. Y. under theCos. Act which is different from the P. Y.Cos. Act which is different from the P. Y.under this Act, (i) the accounting policies,under this Act, (i) the accounting policies,(ii) accounting standards and (iii) the(ii) accounting standards and (iii) themethod and rates of depr. Shall correspondmethod and rates of depr. Shall correspondto those adopted for preparing such a/c.sto those adopted for preparing such a/c.sincluding P/L A/c. for such F. Y. or part ofincluding P/L A/c. for such F. Y. or part ofthe F. Y. falling within the relevant P. Y.the F. Y. falling within the relevant P. Y.
  • ExplanationExplanation ––Book profit means net profit as per P/L A/c.Book profit means net profit as per P/L A/c.prepared under sub. sec. (2), as increased byprepared under sub. sec. (2), as increased by––(a)(a) income-tax paid or payable and provisionincome-tax paid or payable and provisiontherefore,therefore,(b)(b) amounts carried to any reserves, otheramounts carried to any reserves, otherthan a reserve u/s. 33AC,than a reserve u/s. 33AC,(c)(c) provisions for liabilities other thanprovisions for liabilities other thanascertained liabilities.ascertained liabilities.(d)(d) provisions for losses of subsidiaryprovisions for losses of subsidiarycompanies,companies,(e)(e) dividends paid or proposed,dividends paid or proposed,
  • (f) expenditure relatable to income exempt u/s. 10(f) expenditure relatable to income exempt u/s. 10(other than u/s. 10(38)) or 11 or 12(other than u/s. 10(38)) or 11 or 12(g) depreciation,(g) depreciation,(h) The amount of deferred tax and the provision(h) The amount of deferred tax and the provisiontherefore,therefore,if any amount referred to in (a) to (h) above isif any amount referred to in (a) to (h) above isdebited to P/L A/c. and as reduced by –debited to P/L A/c. and as reduced by –(i)(i) amount withdrawn from reserves or provisionsamount withdrawn from reserves or provisions(excluding reserve created before 1.4.97(excluding reserve created before 1.4.97otherwise than by way of debit to P/L A/c.), ifotherwise than by way of debit to P/L A/c.), ifsuch amount is credited to P/L. A/c.,such amount is credited to P/L. A/c.,
  • Amount withdrawn from reserve createdAmount withdrawn from reserve createdor prov. made in a P.Y. relevant to A. Y.or prov. made in a P.Y. relevant to A. Y.1997-98 or any subsequent A. Y. shall be1997-98 or any subsequent A. Y. shall bereduced from the book profit only if thereduced from the book profit only if thebook profit of that P. Y. was increased bybook profit of that P. Y. was increased bythose reserves or provisions,those reserves or provisions,(ii) income exempt u/s. 10 (other than u/s.(ii) income exempt u/s. 10 (other than u/s.10(38)) or 11 or 1210(38)) or 11 or 12(iia) depr. debited to P/L A/c. excluding the(iia) depr. debited to P/L A/c. excluding thedepr. on account of revaluation of assets,depr. on account of revaluation of assets,
  • (iib) amount withdrawn from revaluation res.(iib) amount withdrawn from revaluation res.and credited to P/L A/c. to the extent itand credited to P/L A/c. to the extent itdoes not exceed depr. on account ofdoes not exceed depr. on account ofrevaluation of assets,revaluation of assets,(iii) loss b/f. or unabsorbed depr. whichever(iii) loss b/f. or unabsorbed depr. whicheveris less as per books of account,is less as per books of account,
  • ExplanationExplanation ––For the purposes of this clause –For the purposes of this clause –(a)(a) loss shall not include depr.,loss shall not include depr.,(b)(b) the provisions of this clause shall notthe provisions of this clause shall notapply, if the loss b/f. or unabsorbedapply, if the loss b/f. or unabsorbeddepr. is NIL.depr. is NIL.(iv) amount deductible u/s. 80HHC,(iv) amount deductible u/s. 80HHC,Computed u/s. 80HHC(3)(a) or (b) or (c)Computed u/s. 80HHC(3)(a) or (b) or (c)or 80HHC (3A),or 80HHC (3A),(v) Amount deductible u/s. 80HHE(v) Amount deductible u/s. 80HHEcomputed u/s. 80HHE(3) or 80HHE(3A),computed u/s. 80HHE(3) or 80HHE(3A),
  • (vi) amount deductible u/s. 80HHF(3),(vi) amount deductible u/s. 80HHF(3),(vii) amount of profit of sick industrial co.(vii) amount of profit of sick industrial co.commencing from A. Y. relevant to P. Y. incommencing from A. Y. relevant to P. Y. inwhich it became sick u/s. 17(1) of S.I.C.A.which it became sick u/s. 17(1) of S.I.C.A.and ending with the A. Y. during which theand ending with the A. Y. during which thenet worth of such co. becomes equal to ornet worth of such co. becomes equal to orexceeds the accumulated losses,exceeds the accumulated losses,(viii) Deferred tax credited to P/L A/c.(viii) Deferred tax credited to P/L A/c.Income tax shall include - (i) D.D.T. u/s.Income tax shall include - (i) D.D.T. u/s.115-O or 115R , (ii) interest charged under115-O or 115R , (ii) interest charged underthe I. T. Act, (iii) sur charge, (iv) Edu. Cess,the I. T. Act, (iii) sur charge, (iv) Edu. Cess,or (v) Sec. & Higher Edu. Cess.or (v) Sec. & Higher Edu. Cess.
  • (3) Nothing contained in sub-sec. (1) shall(3) Nothing contained in sub-sec. (1) shallaffect the determination of amounts ofaffect the determination of amounts ofthe relevant P. Y. to be c/f. to subsequentthe relevant P. Y. to be c/f. to subsequentyear(s) u/s 32(2) or 32A(3), 72(i)(ii), 73, 74year(s) u/s 32(2) or 32A(3), 72(i)(ii), 73, 74or 74A(3).or 74A(3).
  • (4) A. co. to which this section applies shall(4) A. co. to which this section applies shallfurnish audit report certifying that the bookfurnish audit report certifying that the bookprofit has been computed according to theprofit has been computed according to theprovisions of this section along with returnprovisions of this section along with returnof income filed u/s. 139(1) or in responseof income filed u/s. 139(1) or in responseto notice u/s. 142(1)(i).to notice u/s. 142(1)(i).Save as otherwise provided in thisSave as otherwise provided in thissection, all other provisions of this Actsection, all other provisions of this Actshall apply to every co., mentioned in thisshall apply to every co., mentioned in thissection.section.
  •  Interest u/s. 234B cannot be levied in caseInterest u/s. 234B cannot be levied in casewhere a company is liable to pay tax u/s.where a company is liable to pay tax u/s.115JB as book profit can be determined115JB as book profit can be determinedafter the end of the year.after the end of the year. Snowcem v.DCIT – Appeal No. 238 ofSnowcem v.DCIT – Appeal No. 238 of2006.2006.
  • Scheme of Tax Credit – S. 115JAAScheme of Tax Credit – S. 115JAA ––(1)(1) Not relevantNot relevant(1A) Where any tax is paid u/s. 115JB (1) by a(1A) Where any tax is paid u/s. 115JB (1) by aco., for A. Y. 2006-07 or any subsequentco., for A. Y. 2006-07 or any subsequentA. Y., the credit of tax so paid shall beA. Y., the credit of tax so paid shall beallowed under this section.allowed under this section.(2) Tax credit to be allowed shall be the(2) Tax credit to be allowed shall be thedifference between the tax paid for any A.difference between the tax paid for any A.Y. u/s. 115JB(1) and tax payable by the ‘A’Y. u/s. 115JB(1) and tax payable by the ‘A’on its total income computed according toon its total income computed according tothe provisions of this Act.the provisions of this Act.
  • No interest shall be payable on the tax creditNo interest shall be payable on the tax creditallowed under this section.allowed under this section.(3) Tax credit shall be c/f. and set off(3) Tax credit shall be c/f. and set offaccording to sub-sec. (4) and (5), but suchaccording to sub-sec. (4) and (5), but suchc/f. shall not be allowed beyond the 10c/f. shall not be allowed beyond the 10ththA.A.Y. immediately succeeding the A. Y. inY. immediately succeeding the A. Y. inwhich it becomes allowable and w.e.f. A. Y.which it becomes allowable and w.e.f. A. Y.2007-08 beyond the 72007-08 beyond the 7ththA. Y.A. Y.(4) Tax credit shall be allowed set off in a(4) Tax credit shall be allowed set off in ayear when tax becomes payable on incomeyear when tax becomes payable on incomecomputed according to the provisions ofcomputed according to the provisions ofthis Act other than S. 115JBthis Act other than S. 115JB
  • (5) Set off of b/f. tax credit for any A. Y. shall(5) Set off of b/f. tax credit for any A. Y. shallbe the difference between tax on its totalbe the difference between tax on its totalincome and the tax which would have beenincome and the tax which would have beenpayable u/s. 115JB for that A. Y.payable u/s. 115JB for that A. Y.(6) Where as a result of an order u/s. 143(1)(6) Where as a result of an order u/s. 143(1)or (3), S. 144, S. 147, S. 154, S. 155,or (3), S. 144, S. 147, S. 154, S. 155,S.245D(4), S. 250, S. 254, S. 260, S. 262,S.245D(4), S. 250, S. 254, S. 260, S. 262,S. 263 or S. 264, tax payable under this ActS. 263 or S. 264, tax payable under this Actis reduced or increased, tax credit allowedis reduced or increased, tax credit allowedunder this section shall be reduced orunder this section shall be reduced orincreased accordingly.increased accordingly.