Calculation of MAT
This query is : Resolved
HEMAL M JHAVERI
(Querist)
06 July 2009
Please give formula for calculation of MAT
Ashok Madhavi
(Expert)
06 July 2009
As per Section 115JB MAT is applicable when Income Tax payable as per Income Tax Act is less than 10% of Book Profit then MAT is applicable,
This situation will arise only when company has incurred the losses in earlier F.Y & they have the profit in current year e.g.
Earlier year Loss :- Rs(10,000)
Profit for the Year :- Rs 12000
Taxable income As per IT :- Rs 2000
Tax Amount :- Rs 680
Which is Less than 10% of Book Profit :- i.e.5.67%
Hence MAT is applicable in above case.
Calculation of Profit for MAT
Taxes Payable as per Income Tax is Less than 10% of Book Profit (PBT + Provision for Loss of Subsidiary + Dividend Paid& Proposed) then MAT Applicable
(This situation is arises only when company incurred Heavy Losses in earlier year & Profit in current year)
This situation will arise only when company has incurred the losses in earlier F.Y & they have the profit in current year e.g.
Earlier year Loss :- Rs(10,000)
Profit for the Year :- Rs 12000
Taxable income As per IT :- Rs 2000
Tax Amount :- Rs 680
Which is Less than 10% of Book Profit :- i.e.5.67%
Hence MAT is applicable in above case.
Calculation of Profit for MAT
Taxes Payable as per Income Tax is Less than 10% of Book Profit (PBT + Provision for Loss of Subsidiary + Dividend Paid& Proposed) then MAT Applicable
(This situation is arises only when company incurred Heavy Losses in earlier year & Profit in current year)
06 July 2009
Now Mat is 15% inplace of 10% as per Budget 2009.
HEMAL M JHAVERI
(Querist)
06 July 2009
Thank you Very Much
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