Calculation of MAT

This query is : Resolved

Report Abuse Follow Query Ask a Query

HEMAL M JHAVERI

HEMAL M JHAVERI (Querist)
Follow

06 July 2009 Please give formula for calculation of MAT

Ashok Madhavi

Ashok Madhavi (Expert)
Follow

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)