In MAT rates are for different categories when Net Taxable Income is more than 1cr and 10cr. Then why do we calculate MAT in all business and profession sums even when NTI < 1cr?
Z
( )
(2960 Points)
Replied 18 January 2015
Why do we calculate?
Because of the following provisions, we need to see whether we have to pay as per the normal provisions or as per MAT provisions and secondly to know how much surcharge is to be paid
"115JB. (1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee, being a company, the income-tax, payable on the total income as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, [2012], is less than [eighteen and one-half per cent] of its book profit, [such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income-tax at the rate of[eighteen and one-half per cent]]."
[The Section below is for AMT]
115JC. (1) Notwithstanding anything contained in this Act, where the regular income-tax payable for a previous year by a person, other than a company, is less than the alternate minimum tax payable for such previous year, the adjusted total income shall be deemed to be the total income of that person for such previous year and he shall be liable to pay income-tax on such total income at the rate of eighteen and one-half per cent.
The rate of MAT do not change but there is change in rate of surcharge
(Citing from the Act itself for the purpose of information but you will understand it on bare reading of colored line)
Provided further that in respect of any income chargeable to tax under section 115A, 115AB, 115AC,
115ACA, 115AD, 115B, 115BB, 115BBA, 115BBC, 115BBD, 115BBE, 115E, 115JB or 115JC of the
Income-tax Act, the amount of income-tax computed under this sub-section shall be increased by a
surcharge, for purposes of the Union, calculated,—
(a) in the case of every individual or Hindu undivided family or association of persons or body of
individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause
(vii) of clause (31) of section 2 of the Income-tax Act, or co-operative society or firm or local authority,
at the rate of ten per cent. of such income-tax, where the total income exceeds one crore rupees;
(b) in the case of every domestic company,—
(i) at the rate of five per cent. of such income-tax, where the total income exceeds one crore
rupees but does not exceed ten crore rupees;
(ii) at the rate of ten per cent. of such income-tax, where the total income exceeds ten crore
rupees;
(c) in the case of every company, other than a domestic company,—
(i) at the rate of two per cent. of such income-tax, where the total income exceeds one crore
rupees but does not exceed ten crore rupees;
(ii) at the rate of five per cent. of such income-tax, where the total income exceeds ten crore
rupees:
[Simillarly]
Provided also that in the case of persons mentioned in (a) above, having total income chargeable to
tax under section 115JC of the Income-tax Act and such income exceeds one crore rupees, the total
amount payable as income-tax on such income and surcharge thereon shall not exceed the total
amount payable as income-tax on a total income of one crore rupees by more than the amount of
income that exceeds one crore rupees:
Provided also that in the case of every company having total income chargeable to tax under section
115JB of the Income-tax Act, and such income exceeds one crore rupees but does not exceed ten
crore rupees, the total amount payable as income-tax on such income and surcharge thereon, shall
not exceed the total amount payable as income-tax on a total income of one crore rupees by more than
the amount of income that exceeds one crore rupees:
Provided also that in the case of every company having total income chargeable to tax under section
115JB of the Income-tax Act, and such income exceeds ten crore rupees, the total amount payable as
income-tax on such income and surcharge thereon, shall not exceed the total amount payable as
income-tax and surcharge on a total income of ten crore rupees by more than the amount of income
that exceeds ten crore rupees.
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