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

Tax queries 1971 views 4 replies

CA RAMESH KUMAR AHUJA

CA DISA LLB

5452 Points Joined July 2008

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)

Pavan Jain S

Chartered Accountant

1575 Points Joined December 2008

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

aakash jaiswal

CA final Student

38 Points Joined January 2009

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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.

CA CS VINAYAK PATIL

CHARTERED ACCOUNTANT

921 Points Joined February 2009

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.	"