25 September 2015
If a an Assessee has Normal Income as per provisions of Income Tax Act of Rs.150000 and is liable to pay AMT u/s 115JC on Exempted income of Rs. 3800000 u/s 80IC so how should we proceed to calculate AMT
Should it be on 150000+3800000=3950000 or just 3800000
also know that i have read the Section 115JC but my query rises because i think that 150000 should not be added back as it falls under the category of basic exmeption i.e. 250000
for further clarification lets assume that normal income under IT ACt is 251000
so as per my interpretation AMT should be calculated on (251000-250000)+3800000=3801000
please tell me if my interpretation is wrong or not
25 September 2015
Section 115JC provides that AMT shall be payable on Adjusted Total Income.
Sub-section 2 of Section 115JC provides the manner of computing Adjusted Total Income. Adjusted Total Income shall be the TOTAL INCOME as INCREASED by deductions claimed under specific sections.
So deduction u/s 80IC has to be added to TOTAL INCOME.
Accordingly, in the first case, AMT will be calculated on 39,50,000 and in the second case it will be calculated on 40,51,000.
Basic exemption limit (slab rate) is applicable for computing REGULAR income tax and NOT for calculating AMT.
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