'Tax Payable' Meaning of the term used in Section 115JB

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The definition of the terM AND EXPRESSION 'Tax Payable' as mentioned in Section 115JB of the Income Tax Act, 1961 has not been given anywhere in the Act.

In the case of a Company dealing in shares, a huge amount of STT was paid during FY 2006-07(AY 2007-08). 

The company is elegible for a Rebate under section 88E and after claiming the rebate the tax liability is NIL.

Whether such rebate may be claimed from the MAT of 7.5% of the book profits. In other words the term Tax Payable as given in Section 115JB means the tax after rebate under section 88E or before that.

Replies (4)

There is no scope for confusion.. Sec 115JB is attracted only if 10% of Book Profits is more than the normal tax liability....

Normal Tax Liability means tax payable as per the provisions of the IT ACT after rebate u/s 88E and tax relief u/s 90

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Hi Ahuja Sir.. In my opinion the term ' tax payable' referred in 115JB refers to the gross tax payable and not the tax after the rebate under the other provisions. The provisions of MAT should be applied if and only if EFFECTIVE TAX PAYABLE TO GOVT IS LESS THAN 10% OF BOOK PROFIT. The rebate is the reduction from tax liability, it reduces the effective tax payable. However the sec 115JB is mechanism to compute the effective tax liability. It should be applied before allowing any rebate under the normal provisions.

Please let me know if u have  any other opinion on the issue.  THanks.

 

Originally posted by :CA RAMESH KUMAR AHUJA
" The definition of the terM AND EXPRESSION 'Tax Payable' as mentioned in Section 115JB of the Income Tax Act, 1961 has not been given anywhere in the Act.
In the case of a Company dealing in shares, a huge amount of STT was paid during FY 2006-07(AY 2007-08).
The company is elegible for a Rebate under section 88E and after claiming the rebate the tax liability is NIL.
Whether such rebate may be claimed from the MAT of 7.5% of the book profits. In other words the term Tax Payable as given in Section 115JB means the tax after rebate under section 88E or before that.
"

 

You must refer Direct Taxes Book of Singhaniya

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