MAT for STPI company

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Rajeev (Querist)

09 March 2009 Hi there,

I have one query regarding MAT calculation for software company registered with STPI. We have 100% export. We bought an office worth 70 lac & computer worth 5 lac. If we have Book profit ( before tax & depreciation) of Rs. 15 Lac. Depreciation on office is Rs 7.0 lac & 2.3 lac for computers. The net profit after depreciation comes out to be 5.7 lac. Now pls. let me know.. how MAT will be applicable? WIll it be 10% of 5.7 Lac (profit after depreciation) or 10% of 15.oc lac (Book profit before tax & depreciation)..? I am tottaly confused

chetan soni

chetan soni (Expert)

09 March 2009 As per Sec 115 JB book profit means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (2), as increased by
a)the amount of income-tax paid or payable, and the provision therefor; or
b)the amounts carried to any reserves, by whatever name called 71[, other than a reserve specified under section 33AC]; or
c)the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; or
d)the amount by way of provision for losses of subsidiary companies; or
e)the amount or amounts of dividends paid or proposed ; or
f)the amount or amounts of expenditure relatable to any income to which 72[section 10 (other than the provisions contained in clause (38) thereof) or 73[***] section 11 or section 12 apply; or]
g)the amount of depreciation,]
h)the amount of deferred tax and the provision therefor
As reduced by
i)the amount withdrawn from any reserve or provision (excluding a reserve created before the 1st day of April, 1997 otherwise than by way of a debit to the profit and loss account), if any such amount is credited to the profit and loss account:
ii)the amount of income to which any of the provisions of section 10 (other than the provisions contained in clause (38) thereof)] or section 11 or section 12 apply, if any such amount is credited to the profit and loss account; or
iiia) the amount of depreciation debited to the profit and loss account (excluding the depreciation on account of revaluation of assets); or
iiib) the amount withdrawn from revaluation reserve and credited to the profit and loss account, to the extent it does not exceed the amount of depreciation on account of revaluation of assets referred to in clause (iiia); or
iv)the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account.
v)the amount of profits eligible for deduction under section 80HHE
vi)the amount of profits eligible for deduction under section 80HHF
vii)the amount of profits of sick industrial company

Please check the applicability of above clauses in your case.

Rajeev

Rajeev (Querist)

09 March 2009 Thanks, Chetan!

I read above but not clear. Can you pls. answer specifically to query asked with example values.