Application of basic exemption in amt calculation

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Vijay (Querist)
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25 September 2015 If a an Assessee has Normal Income as per provisions of Income Tax Act of Rs.150000
and is liable to pay AMT u/s 115JC on Exempted income of Rs. 3800000 u/s 80IC so how should we proceed to calculate AMT

Should it be on 150000+3800000=3950000
or just 3800000

also know that i have read the Section 115JC but my query rises because i think that 150000 should not be added back as it falls under the category of basic exmeption i.e. 250000

for further clarification lets assume that normal income under IT ACt is 251000

so as per my interpretation AMT should be calculated on (251000-250000)+3800000=3801000

please tell me if my interpretation is wrong or not

Thanks in advance

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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25 September 2015 Section 115JC provides that AMT shall be payable on Adjusted Total Income.

Sub-section 2 of Section 115JC provides the manner of computing Adjusted Total Income. Adjusted Total Income shall be the TOTAL INCOME as INCREASED by deductions claimed under specific sections.

So deduction u/s 80IC has to be added to TOTAL INCOME.

Accordingly, in the first case, AMT will be calculated on 39,50,000 and in the second case it will be calculated on 40,51,000.

Basic exemption limit (slab rate) is applicable for computing REGULAR income tax and NOT for calculating AMT.

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