26 June 2023
Hi Friends, A company has an accumulated losses of about 100 lacs carried forward since many years. Last few year 2021-22 the company had a book profit on which it has paid Tax under MAT in 2022-23 it has a net profit of Rs 90 lacs because of booking the income against an advance lying in the books. The Management thinks since it has already an accmulamated losses so it shouldn't be paying the tax for FY 2022-23 as they are not aware of MAT provisions.
I am seeking an expert view to answer of the following questions(as the actual working may vary when computed after tax audit).
1. Is the company eligible to set off b/f losses in this case in a scenario when its boo profit is higher than the profit computed as per Income tax act or visa versa (i.e when actual tax as per IT act is higher than Book Profit/MAT) 2. If the company is still liable to pay the MAT in this case what benefit it is getting having an accumulated losses brought forward.
CAclubindia
