Applicability of mat in case of capital gain

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Jyoti jain (Querist)
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09 September 2013 A Company has GTI of Rs. 5 lacs on sale of debt oriented mutual fund. Now, as per the provision of MAT Company has to pay tax @ 19.05% i.e.Rs. 95,250.00. But as per the provision of Capital Gain, the tax will be levied @ 10% without indexation or 20% with indexation. So the tax under the head
Capital gain will be Rs. 50,000.00. So how to compute the tax liability of the Company. Why the Company should pay MAT??

V Vara Prasad

V Vara Prasad (Expert)
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09 September 2013 The company has to pay MAT or income tax whichever is higher. If MAT is higher then it can claim credit in future years. So company has to pay higher only

Jyoti jain

Jyoti jain (Querist)
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09 September 2013 sir, can u you please give the reference about where it is written that the Company has to pay MAT or income tax whichever is higher??

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V Vara Prasad

V Vara Prasad (Expert)
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09 September 2013 Section 115 JAA and JB of IT Act