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Advance Tax on MAT - URGENT

Vivek Angrish (Manager Finance & Accounts) (232 Points)

08 March 2010

What is the provision of Advance Tax on MAT. What I want to know is that whether we have to pay advance tax on MAT, and if yes then under which section of I.T Act, as i have not found it anywhere in the Act.

Plz. Help.it's Urgent

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5 Replies

Vivek Angrish (Manager Finance & Accounts) (232 Points)
Replied 09 March 2010

Hellooo..... all professionals and students.

Plz. clarify that whether there is any need of deposit of advance tax on MAT. and if yes then under which section or rule. Plz. help. It's really urgent. Also if the co. has failed to pay the advance tax, then whether it has to deposit the interest on the late pymnt. of advance tax.

Chintan Shah (-) (534 Points)
Replied 09 March 2010

Friend Vivek Section 115JB which deals with MAT states that all the provisions of the Act shall apply to the tax payable under section 115JB. Hence Advance tax will be payable. There are lot of judgements u/s 115J that state that no advance tax is payable in respect of MAT computed u/s 115J. However, 115J didnot contain a clause which stated that all provisions of the act apply to tax payable under that section.. So dont confuse yourself with those judgements.. Advance tax is payable.. Provisions regarding interest u/s 234 B and C are also applicable.. Regards Chintan

Vivek Angrish (Manager Finance & Accounts) (232 Points)
Replied 09 March 2010

But Mr. Chintan, Advance tax provision falls under section 208 " which states that advance tax is to be paid under the provisions of this chapter i.e ch.17 and Sec.115JB falls under Chapter 12. So, i m lil confused regarding this. Plz. clarify

Vivek Angrish (Manager Finance & Accounts) (232 Points)
Replied 09 March 2010

Plz. reply this question, as it is most urgent.

Chintan Shah (-) (534 Points)
Replied 10 March 2010

Sirji,

Please refer Section 208. It states:

"Advance tax shall be payable.......................where amount of such tax payable...............is ten thousand rupees or more."

What you are computing under chapter 12 is not advance tax, its MAT. Advance tax is computed in accordance of the provisions of Chapter 17 - Part C, which contains Section 207 to Section 219. Hence, what you have to do is estimate your total income for the year and than if its low than 10% of your book profits, than tax payable by you would be 10% of book profits, which will become your advance tax. No doubt that advance tax is computed under chapter 17, but the estimated tax liability is to be computed as per the normal provisions of the act which includer Chapter 12 ie. MAT.

Regards,

Chintan