CA Ayush Agarwal
Friends, I Hav Tried To Present MAT in simple Way.
1. Normally companies are maintaining two set of books of accounts.
2. Some times income computed under income tax law will be zero or negative. In this situation the company will escape from payment of tax.
3. Special provision are Introduced in Finance Act 2000 is called 115JA Now 115JB.
4. PROVISION AS PER SECTION 115JB:
STEP I: Find out tax payable under the normal provision i.e. as per p&l a/c [Tax @33.99%(SC*+EC+SHEC)].
STEP II: Find out Book profit** and calculate the tax@
11.33%((SC+EC+SHEC)*.
STEP III: STEP I – STEP II = If more than zero C/F and set of with next year tax credit up to 7 years.
If less then zero Or zero 115JB will not apply.
**BOOK PROFIT AS PER 115JB:
| Net profit as per profit& loss account |
|
xxx |
| ADD: | ||
| Income tax paid or payable | xx | |
| FBT | xx | |
| Proposed dividend or dividend paid | xx | |
| Amount carried to any reserve (Other than33AC). |
xx | |
| The amount of any expenditure relatable to any income u/s 10(except 10(38)) or 11or 12 will apply. | xx | |
| Provision made to liabilities (Other than ascertained). | xx | |
| Depreciation | xx | xxx |
|
LESS: |
||
| Amount withdrawn from any Reserve or provision. | xx | |
| The amount of any income relatable to any income u/s 10(except 10(38)) or 11or 12 will apply. | xx | |
| Depreciation as per P&L a/c (Except depreciation of revaluation assets) | xx | |
| Amounts withdrawn from revaluation reserves and credited to p&l account, but it does not exceed the amount of depreciation. | xx | |
|
The amount of loss B/F or unabsorbed depreciation |
xx | |
|
The amount of profits of sick industries company |
xx | (xxx) |
|
BOOK PROFIT |
xxx |
*(surcharge + education cess + higher secondary edu cess)
CAclubindia
