MAT U/s 115J

As per sec 115 JB of Income Tax Act every company has to find tax on Book Profit.

Tax liablity has to be met by considering, the higher liabilty on Tax on normal profit or Tax on Book Profit

Net Profit /Loss computed as per Companies Act will be considered as base for the computation of Book Profit.

The following items has to be added back to Net profit /Loss as per P& L account

1)Income tax paid, Payable.or provision there of(Including DDT.Interest,Cess,Education cess  ..)

2)Deferred Tax amount or provision there of

3)Amount transfeered to any reserve

4)Amount provided for meeting unascertained liabilites

5)Any provision to meet Loss of Subsidiries companies

6)Dividend declared or proposed

7)Expenditure incurred in relation to Income earned under sec 10,11,12(exemption:Sec10(38))

8) Depreciation provided in the Books of Accounts 

The following amount should be reduced from the Profi

1)Depreciation(excluding the depreciation on revalued asset)

2)Income earned in relation to sec.10,11,12(exemption 10(38))

3)Deferred Tax Asset or Provison therof

4)Amount credited from any reserve.

Current Rate for MAT for the AY 2010-11 is 15%

MAT is not applicale to companies operating in SEZ.

Tax paid under MAT scheme can be carry forward for a period of 10 years