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After the enforcement of companies act-13

SUMAN KUMAR MISHRA (Student CA IPC / IPCC) (32 Points)

22 June 2015

Sir/Madam

I want to know whether the MAT will applicable on Depreciation amount which is generated out of change in depreciation method(Earlier Companies Act-1956 to Companies Act-2013).

In Companies Act-2013 we have to adjust excess/less depreciation with Retained Earning so my question is whether MAT will apply on adjustment amount of retained earning.

Thanks & Regards

Suman

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Rashi Bajaj (CA) (752 Points)
Replied 22 June 2015

MAT is calculated on book profits as per the Companies Act. While ariving at such book profits, one would obviously incorporate the effect of depreciation change as per the New Companies Act, 2013. In my opinion, MAT will apply on adjustment amount of current year profits. i.e. profits for the year should be adjusted for increase or decrease in total depreciation.