Sale of Agri Land and MAT

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This query is : Resolved

Sivanesh Rajendran (Querist)

25 November 2008 Sale of agricultural land by an assessee does not attract Capital Gains Tax. But when the assessee is a Corporate Entity will it be liable to pay Minimum Alternate Tax on the Sale Consideration recieved?

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)

25 November 2008 First of all Sale of only RURAL AGRI-LAND is exempt under the income tax act.

If the assessee is a Corporate Entity even then the Non-Taxable Income cannot be considered for calculation of Book Profit and thus not liable for MAT.

Sivanesh Rajendran

Sivanesh Rajendran (Querist)

25 November 2008 But the Section 115JB does not have a provision for deducting the sale consideration from Book profit.

Ravikumar.G

Ravikumar.G (Expert)

25 November 2008 As per MAT , Income exempt u/s 10/11/12 (except 10(38), 10(A), 10(B)), if any credited to p & L a/c which can be deducted from that Income.

Sivanesh Rajendran

Sivanesh Rajendran (Querist)

25 November 2008 But Profit on sale of Agricultural Land is not exempt U/S 10/12/11 but it is exempt from Capital gains since Agricultural Land is excluded from the definition of Capital Asset U/S.2(14). So will it attract MAT the consideration is not deductible from book profit as per the provisions of 115JB?

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)

25 November 2008 Still it will not considered for calculation of MAT as this is not part of Income.

Income which is exempt by law in one term cannot be taxable in other term.

Sivanesh Rajendran

Sivanesh Rajendran (Querist)

25 November 2008 Thank you CA.Thilak Raj Sharma

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