Calculation of MAT

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This query is : Resolved

Ramesh Chandra Pusola (Querist)

04 January 2011 Dear Experts,
Please guide me on following issue :

1) our Company sold shares, which were held for 2 years. They were sold though stock exchange. While calculating the Book profit as per 115JB MAT Taxable liability should we include the long term capital gain made on sale of shares or should be exclude the long term capital gain on sale of shares.
2) Our Company also earned dividend on there shares during the year. Can dividend also be included while calculating book profit as per section 115JB ?

Please guide me.
Thanking you in advance

CA Ankit Gulgulia (Jain)

CA Ankit Gulgulia (Jain) (Expert)

04 January 2011 Dear Ramesh,

Kindly Note the Treatment :
1) For Long term Capital Gain which is exempt u/s 10(38) (Since STT is Paid) it is not to be Adjusted in Book Profits, hence it will remain included in Book Profits

2) For Dividend Received (exempt u/s 10(34)) , it should be excluded from Book Profits U/s Explanation 1 to S.115JB.

As per Explanation 1 of S.115JB:-

ii) the amount of income to which any of the provisions of 12[section 10 (other than the provisions contained in clause (38) thereof)] or 13[section 10A or section 10B or] section 11 or section 12 apply, if any such amount is credited to the profit and loss account; or

Hence 10(38) is Specifically Referred thus no Adjustment. But 10(34) must be Excluded.Do Adjustment Both for Income & Corresponding Expenses.

Regards
Ankit Gulgulia

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