Amount of mat

This query is : Resolved

Mohit Chhabra (Querist)
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15 March 2014 Our Book Profit after Depreciation is 6,00,000/-
Depreciation 20,66,932

Detail of Loss
2013-14 Unabsorbed Depreciation 2905351/-

Mohit Chhabra

Mohit Chhabra (Querist)
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15 March 2014 What will be the amount of MAT

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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14 July 2024 To determine the Minimum Alternate Tax (MAT) liability based on the given details, we need to understand the components involved and how MAT is calculated.

### Understanding MAT Calculation:

MAT is applicable to companies whose tax liability computed as per normal provisions of the Income Tax Act is lower than a certain percentage of their book profit. Here’s how it's generally calculated:

1. **Book Profit**: This is the profit as shown in the Profit and Loss Account prepared in accordance with the provisions of the Companies Act, before deducting income tax expenses or provisions.

2. **Adjusted Book Profit**: This is computed by adjusting the net profit as per the profit and loss account for certain specified items as per the Income Tax Act. These adjustments may include adding back certain expenses or deductions claimed under the normal provisions of the Income Tax Act.

3. **MAT Rate**: The current MAT rate for companies is 18.5% (as of the last known rate).

### Steps to Calculate MAT:

Given the information provided:

- **Book Profit after Depreciation**: 6,00,000/-
- **Depreciation**: 20,66,932 (presumably the total depreciation for the year)

Now, considering the unabsorbed depreciation from previous years:

- **Unabsorbed Depreciation **: 29,05,351/-

### Calculation:

1. **Adjusted Book Profit**:
- Start with the Book Profit after Depreciation: 6,00,000/-
- Add back the total depreciation for the year: 20,66,932
- Adjusted Book Profit = 26,66,932/-

2. **MAT Computation**:
- Compute 18.5% of the Adjusted Book Profit to determine the MAT liability:
- MAT = 4,93,919.42 (approximately)

### Additional Considerations:

- **Adjustments**: If there are any adjustments required under MAT provisions (like adjustments for unabsorbed depreciation or certain expenses), those should be considered accordingly.

- **Rates**: Always verify the current applicable rate of MAT, as it may change over time with amendments in tax laws.

### Conclusion:

Based on the information provided, the MAT liability for the company can be estimated to be approximately 4,93,919.42/- (subject to final adjustments and current tax rates). This estimation assumes the MAT rate is 18.5% and incorporates the adjusted book profit considering depreciation and other relevant factors. For precise calculations and compliance, consulting with a tax advisor or accountant familiar with Indian tax laws and MAT provisions would be advisable.

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