06 July 2009
As per Section 115JB MAT is applicable when Income Tax payable as per Income Tax Act is less than 10% of Book Profit then MAT is applicable,
This situation will arise only when company has incurred the losses in earlier F.Y & they have the profit in current year e.g.
Earlier year Loss :- Rs(10,000) Profit for the Year :- Rs 12000 Taxable income As per IT :- Rs 2000 Tax Amount :- Rs 680 Which is Less than 10% of Book Profit :- i.e.5.67% Hence MAT is applicable in above case.
Calculation of Profit for MAT Taxes Payable as per Income Tax is Less than 10% of Book Profit (PBT + Provision for Loss of Subsidiary + Dividend Paid& Proposed) then MAT Applicable (This situation is arises only when company incurred Heavy Losses in earlier year & Profit in current year)
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