Wils24
Student
Yogendra1975
Finance & Accounts
Anil_aki
Management Trainee

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hi every one i am a management trainee. i would like to know about the MAT and how is it calculated, i will be thankful if any buddy can share some knowledge about MAT. looking forward for a rely :D
From India , New Delhi
MAT-Sec 115JB

The concept of Minimum Alternate Tax (MAT) was introduced in the direct tax system to make sure that companies having large profits and declaring substantial dividends to shareholders but who were not contributing to the Govt by way of corporate tax, by taking advantage of the various incentives and exemptions provided in the Income-tax Act, pay a fixed percentage of book profit as minimum alternate tax.

Section 115JB, inserted by the Finance Act, 2000 has cast a responsibility on the chartered accountant to certify that the book profit has been computed in accordance with the provisions of the Income-tax Act. He has also to certify the income-tax payable by the company.

Go through the example given below, u will understand the provision clearly.

1. Every company required to compute tax both under the income tax and under sec 115 JB
2. Profit computed under the income tax is called regular profit and the tax under this method is called regular tax
3. profit computed under sec 115jb is called Book profit and the tax computed is called MAT.
4. every year a company required to compute the tax under the both methods and required to pay higher of those.
5. the company which has paid the MAT in any year can carryforward to the next subsequent years to setoff against the tax liability in which it pays the regular tax.

Tax payable @ 7%

Yogendra

MAT-Sec 115JB

The concept of Minimum Alternate Tax (MAT) was introduced in the direct tax system to make sure that companies having large profits and declaring substantial dividends to shareholders but who were not contributing to the Govt by way of corporate tax, by taking advantage of the various incentives and exemptions provided in the Income-tax Act, pay a fixed percentage of book profit as minimum alternate tax.

Section 115JB, inserted by the Finance Act, 2000 has cast a responsibility on the chartered accountant to certify that the book profit has been computed in accordance with the provisions of the Income-tax Act. He has also to certify the income-tax payable by the company.

Go through the example given below, u will understand the provision clearly.

1. Every company required to compute tax both under the income tax and under sec 115 JB
2. Profit computed under the income tax is called regular profit and the tax under this method is called regular tax
3. profit computed under sec 115jb is called Book profit and the tax computed is called MAT.
4. every year a company required to compute the tax under the both methods and required to pay higher of those.
5. the company which has paid the MAT in any year can carryforward to the next subsequent years to setoff against the tax liability in which it pays the regular tax.

Tax Payable @ 7%

From India , Delhi
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