MAT Gross assets in relation to Fixed Assets-reg
This query is : Resolved
16 June 2010
The Excerpts from the Revised Discussion paper on DTCode is reproduced below for reference
It has been proposed in the DTC that the "value of gross assets" will be the aggregate of the value of gross block of fixed assets of the company, the value of capital works in progress of the company, the book value of all other assets of the company, as on the last day of the relevant financial year, as reduced by the accumulated depreciation on the value of the gross block of the fixed assets and the debit balance of the profit and loss account if included in the book value of other assets. The rate of MAT will be 0.25 per cent of the value of gross assets in the case of banking companies and 2 per cent of the value of gross assets in the case of all other companies. The MAT will be a final tax. Hence, it will not be allowed to be carried forward for claiming tax credit in subsequent years.
I have a few doubts in the above discussion
which are as follows:
1). Whether the the gross block of fixed assets are to be reduced as per The Companies Act or Income Tax Act?
2). What do they mean by "The debit balance of the profit and loss account if included in the book value of other assets"?
Clarity is needed regarding this issue.
It has been proposed in the DTC that the "value of gross assets" will be the aggregate of the value of gross block of fixed assets of the company, the value of capital works in progress of the company, the book value of all other assets of the company, as on the last day of the relevant financial year, as reduced by the accumulated depreciation on the value of the gross block of the fixed assets and the debit balance of the profit and loss account if included in the book value of other assets. The rate of MAT will be 0.25 per cent of the value of gross assets in the case of banking companies and 2 per cent of the value of gross assets in the case of all other companies. The MAT will be a final tax. Hence, it will not be allowed to be carried forward for claiming tax credit in subsequent years.
I have a few doubts in the above discussion
which are as follows:
1). Whether the the gross block of fixed assets are to be reduced as per The Companies Act or Income Tax Act?
2). What do they mean by "The debit balance of the profit and loss account if included in the book value of other assets"?
Clarity is needed regarding this issue.
16 June 2010
As per my concern
1)The gross block of fixed assets are to be reduced as per Companies Act because we calculate MAT, where their is nil return furnish by the assessee as per INcome tax Act
2)Here debit balance of the P/L may means the provision we create on assets.
1)The gross block of fixed assets are to be reduced as per Companies Act because we calculate MAT, where their is nil return furnish by the assessee as per INcome tax Act
2)Here debit balance of the P/L may means the provision we create on assets.
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17 June 2010
The discussion paper released on 15th June again proposes taxing the book profit and not to go for aaset based MAT. So let us see!
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