Hi . Can anyone help me if a existing pvt ltd company shift its manufacturing unit from one premises to another premises by selling old premises and investing full amount in new premises . MAT tax will be apply on gain on sale of property?
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MAT on sale on industrial property by private limited company
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As per section 115JB of Income Tax Act 1961, MAT Shall apply to all companies including foreign companies subject to specified conditions. MAT shall be paid @ 15% on book profits. To calculate Book profits Some adjustements are required to make additions or deletions from Net profit of a company. Since, in your case transferring unit fulfills transfer definition u/s 2(47) and hence Capital gain shall attract. While calculating MAT, Gain on sale of property does not affect the book profit u/s 115JB. You can ignore this adjustment while calculating book profit.
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