Change in method of depreciation

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Abhinav (Querist)
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17 November 2012 The company has changed its method of depreciation from WDV to SLM. Now surplus of deprecation of previous years is credited to profit & loss a/c as an extraordinary item. Now will this surplus will be included in Book profit for the purpose of calculation of MAT????

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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21 November 2012 MAT is levied on book profit. Explanation 1 to Section 115JB prescribes the method for computing book profit.

Book profit means profit as per Profit & Loss as increased and reduced by certain items.

The Explanation does not provide for reduction of surplus arising on change in method of depreciation.

Accordingly the same will be included while computing MAT.

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