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MAT Calculation of Book Profit

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(Querist)
06 September 2008 If we take PBT for computation of Book profit, then shall we have to deduct Deferred Tax Liability from PBT or Not ?Please mention reasons..
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Reetika Goel

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Reetika Goel (Expert)
08 September 2008 For calculation of Book Profit for the purpose of MAT, we just take Profit under the Profit & Loss A/c and make some adjustment as mentioned u/s 115J.

If you pick PAT from the profit and loss a/c then only you will be required to make adjustment for tax.

The format under Profit & Loss A/c is as follows:
Profit before Tax: xxxx
Provision for
- Income Tax xxx
- Fringe Benefit Tax xxx
- Deferred Tax xxx
-----
Profit after Tax: xxxx

So, if you have taken PAT, then only you will add(Subtract) back deferred tax liability(Deferred tax asset), otherwise there is no need to make any adjustment.
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Harshit Malviya

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Harshit Malviya (Querist)
08 September 2008 Thanks Miss Reetika .
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