Mat

This query is : Resolved

abhishekdugar2202 (Querist)
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13 August 2012 Dear All,

A Co. has earned book profit of Rs 100
Depreciation as per co Rs 10
Depreciation as per IT Rs 70

Gross Taxable Income Rs 40
Tax Provision (40*30.9%) Rs 12.36

In the above case is MAT applicable as provision for mat on book profit is more than normal tax.?
Please Help

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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14 August 2012 Book profit for the purpose of MAT = 90
MAT = 90*18.5% = 16.65 + cess

Since MAT is higher than normal tax, MAT is applicable and the company will have to pay MAT.

The company is eligible for MAT credit.

abhishekdugar2202

abhishekdugar2202 (Querist)
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14 August 2012 Thanx... same thing was going in my mind too..
but just had in my mind ki if the difference is because of depreciation then are we to par mat..

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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14 August 2012 As per Section 115JB, book profit is computed after considering depreciation as per Companies Act.

Accordingly, MAT is payable in this case.

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