Depreciation
Querist : Anonymous
Querist : Anonymous
Querist : Anonymous
Querist : Anonymous
In many cases we see company will have book profit but no taxable income due to many reasons say,deductions,exemptions,allowances.
One of the reason is depreciation,
Yes,even though company have book profit they may not pay tax as they will not have adequate taxable income to pay tax because higher rate of depreciation as per IT act compared to company act or it may be because of additional depreciation.
So inorder to avoid this IT act introduces MAT u/s Sec.115jB
.
Under the provisions of Section 115JB, where the income tax calculated under the income tax act is less than 18.5 % of the book profit, then such book profit shall be deemed to the total income of the
assessee and tax payable by the assessee shall be 18.5 % on book profits.
Just study 115JB to understand more on this topic
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