MAT

Yes. For income tax purpose, LTCG will be exempt. But, profits include LTCG for 115JB profits. Hence MAT will be payable on the  book profits.

rightly said by divya because income exempt u/s 10(38) under income tax act is also considered as income u/s 115JB for computing MAT

Dear Divya,

For the purpose of calculating book profit LTCG will be excluded and any expenditure related to such income will be added back.

MAT is applicable to all companies. If tax calculated as per MAT is higher than Normal provision then MAT is applicable.

In the case of Pratik since there is no other income, MAT is lower than normal provision of tax calculation then MAT will be not applicable.

Under section 115JB(2), one of the item to be reduced is as under 

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.

LTCG u/s 10(38) should not be reduced from book profit. in other words dont make any adjustment to book profits

Agree with CA Somshekar....

LTCG u/s 10(38) should not be reduced from book profit. Thanks for correction.

can u guys xplain me wat izz MAT????

yes Agree with CA Somshekar.

for- jigar  : MAT mean minimum alternate tax that the companies have to pay in case when their profit as per income tax Act is less than book profit 

dear jigar, 

if income tax payable by a co. is less than 18% of book profits

then 18% of book profit is payable along with applicable cess and surcharge ( known as MAT)

now if  in future i.e upto 10 years from the year in which MAT is payable the income tax payable is more than 18% of book profits then the MAT credit is taken against such tax payable

dear varun ,

MAT is payable even if there is loss as per income tax act

dear varun ,

MAT is payable even if there is loss as per income tax act