Applicability of mat on writing off of interest on govt.loan
This query is : Resolved
17 August 2011
Govt. of India has decided to write off the Loan and unpaid interest accrued thereof of one of the Public sector Enterprises by way of Restructuring process.Interest accrued every year was disallowed by Income Tax Department u/s 43B on the ground that no repayment of interest was made by the Establishment.
In the stated circumstances I want to know whether waiver of interest by Govt.of india will attract MAT liability.
In the stated circumstances I want to know whether waiver of interest by Govt.of india will attract MAT liability.
18 August 2011
There are 2 Parts
1) Principal
2) Interest
Waiver of Principal amount is a capital receipt
Waiver of interest is a revenue receipt. Now the dis-allowances for interest is not covered in the 115JA. So what you have to do is the portion which has been disallowed you can take it to the items relating to the prior period and take the advantage
1) Principal
2) Interest
Waiver of Principal amount is a capital receipt
Waiver of interest is a revenue receipt. Now the dis-allowances for interest is not covered in the 115JA. So what you have to do is the portion which has been disallowed you can take it to the items relating to the prior period and take the advantage
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