Mat
This query is : Resolved
10 August 2017
Sir what is the definition of MAT in income tax ? Whether it is applicable in PVT LTD company only ?
11 August 2017
MAT is applicable to all Companies registered under Companies Act 2013 including Electricity, Insurance, Banking Companies except Sec 8 Companies, Companies Incorporated deriving Income under Life Insurance Business, and a foreign company:
- being resident of a DTAA country with No PE in India
- being resident of a Non-DTAA country and who is not required to seek registration under any law in force in India.
- being resident of a DTAA country with No PE in India
- being resident of a Non-DTAA country and who is not required to seek registration under any law in force in India.
11 August 2017
MAT is applicable to all Companies registered under Companies Act 2013 including Electricity, Insurance, Banking Companies except Sec 8 Companies, Companies Incorporated deriving Income under Life Insurance Business, and a foreign company:
- being resident of a DTAA country with No PE in India
- being resident of a Non-DTAA country and who is not required to seek registration under any law in force in India.
- being resident of a DTAA country with No PE in India
- being resident of a Non-DTAA country and who is not required to seek registration under any law in force in India.
12 August 2017
abhishek sir thank you very much for your prompt reply. My company is a pvt ltd company. What is the formula for working out MAT ? What is the full form of MAT ? Please.
12 August 2017
MAT Means Minimum Alternate Tax.
It is calculated as 18.50% of Book Profits.
Book Profits are calculated in the below manner:
Net profit as per Profit & Loss A/c prepared in accordance with Schedule VI to the Companies Act[now Schedule III to the Companies Act, 2013] XXXXX
Add : Following items (if they are debited to the P & L A/c)
Income-tax paid/payable and the provision thereof (*) XXXXX
Amounts carried to any reserves by whatever name called (Other than reserve specified under Section 33AC) XXXXX
Provisions for unascertained liabilities XXXXX
Provisions for losses of subsidiary companies XXXXX
Dividends paid/proposed XXXXX
Expenditure related to incomes which are exempt under section 10 [other than section 10(38)] section 11 and section 12 XXXXX
The amount or amounts of expenditure relatable to, income, being share of the taxpayer in the income of an association of persons or body of individuals, on which no income-tax is payable in accordance with the provisions of section 86. XXXXX
The amount or amounts of expenditure relatable to income accruing or arising to a taxpayer being a foreign company, from :
(a) the capital gains arising on transactions in securities; or
(b) the interest, royalty or fees for technical services chargeable to tax at
the rate or rates specified in Chapter XII if the income-tax payable on above income is less than the rate of MAT
XXXXX
[As amended by Finance Act, 2016]
The amount representing notional loss on transfer of a capital asset, being share or a special purpose vehicle to a business trust in exchange of units allotted by that trust referred to in clause (xvii) of section 47 or the amount representing notional loss resulting from any change in carrying amount of said units or the amount of loss on transfer of units referred to in clause (xvii) of section 47 XXXXX
Expenditure relatable to income by way of royalty in respect of patent chargeable to tax under section 115BBF XXXXX
Amount of depreciation debited to P & L A/c XXXXX
Deferred tax and the provision thereof XXXXX
Provision for diminution in the value of any asset XXXXX
The amount standing in revaluation reserve relating to revalued asset on the retirement or disposal of such an asset if not credited to profit and loss account XXXXX
The amount of gain on transfer of units referred to in clause (xvii) of section 47 computed by taking into account the cost of the shares exchanged with units referred to in the said clause or the carrying amount of the shares at the time of exchange where such shares are carried at a value other than the cost through profit or loss account, as the case may be; XXXXX
Less : Following items (if they are credited to the P & L A/c)
Amount withdrawn from any reserve or provision if credited to P&L account (**) (XXXXX)
Incomes which are exempt under section 10 [other than section 10(38)] section 11 and section 12 (XXXXX)
Amount of depreciation debited to P&L account (excluding the depreciation on revaluation of assets) (XXXXX)
Amount withdrawn from revaluation reserve and credited to P&L account to the extent it does not exceed the amount of depreciation on revaluation of assets (XXXXX)
The amount of income, being the share of the taxpayer in the income of an association of persons or body of individuals, on which no income-tax is payable in accordance with the provisions of section 86, if any such
amount is credited to the profit and loss account XXXXX
[As amended by Finance Act, 2016]
The amount of income accruing or arising to a taxpayer being a foreign company, from :
(a) the capital gains arising on transactions in securities; or
(b) the interest, royalty or fees for technical services chargeable to tax at the rate or rates specified in Chapter XII
if such income is credited to the profit and loss account and the income tax payable on above income is less than the rate of MAT. XXXXX
The amount (if any, credited to the profit and loss account ) representing
(a) notional gain on transfer of a capital asset, being share of a special purpose vehicle to a business trust in exchange of units allotted by that trust referred to in clause (xvii) of section 47; or
(b) notional gain resulting from any change in carrying amount of said units; or
(c) gain on transfer of units referred to in clause (xvii) of section 47,
The amount representation notional gain on transfer of units referred to in clause (xvii) of section 47 computed by taking into account the cost of the shares exchanged with units referred to in the said clause or the carrying
amount of the shares at the time of exchange where such shares are carried at a value other than the cost through profit or loss account, as the case may be; XXXXX
Income by way of royalty in respect of patent chargeable to tax under section 115BBF XXXXX
Amount of brought forward loss or unabsorbed depreciation, whichever is less as per books of account (XXXXX)
Profits of a sick industrial company till its net worth becomes zero/positive (XXXXX)
Deferred tax, if credited to P&L account (XXXXX)
Book profit to be used to compute MAT XXXXX
Regards,
Abhishek
9911958483
It is calculated as 18.50% of Book Profits.
Book Profits are calculated in the below manner:
Net profit as per Profit & Loss A/c prepared in accordance with Schedule VI to the Companies Act[now Schedule III to the Companies Act, 2013] XXXXX
Add : Following items (if they are debited to the P & L A/c)
Income-tax paid/payable and the provision thereof (*) XXXXX
Amounts carried to any reserves by whatever name called (Other than reserve specified under Section 33AC) XXXXX
Provisions for unascertained liabilities XXXXX
Provisions for losses of subsidiary companies XXXXX
Dividends paid/proposed XXXXX
Expenditure related to incomes which are exempt under section 10 [other than section 10(38)] section 11 and section 12 XXXXX
The amount or amounts of expenditure relatable to, income, being share of the taxpayer in the income of an association of persons or body of individuals, on which no income-tax is payable in accordance with the provisions of section 86. XXXXX
The amount or amounts of expenditure relatable to income accruing or arising to a taxpayer being a foreign company, from :
(a) the capital gains arising on transactions in securities; or
(b) the interest, royalty or fees for technical services chargeable to tax at
the rate or rates specified in Chapter XII if the income-tax payable on above income is less than the rate of MAT
XXXXX
[As amended by Finance Act, 2016]
The amount representing notional loss on transfer of a capital asset, being share or a special purpose vehicle to a business trust in exchange of units allotted by that trust referred to in clause (xvii) of section 47 or the amount representing notional loss resulting from any change in carrying amount of said units or the amount of loss on transfer of units referred to in clause (xvii) of section 47 XXXXX
Expenditure relatable to income by way of royalty in respect of patent chargeable to tax under section 115BBF XXXXX
Amount of depreciation debited to P & L A/c XXXXX
Deferred tax and the provision thereof XXXXX
Provision for diminution in the value of any asset XXXXX
The amount standing in revaluation reserve relating to revalued asset on the retirement or disposal of such an asset if not credited to profit and loss account XXXXX
The amount of gain on transfer of units referred to in clause (xvii) of section 47 computed by taking into account the cost of the shares exchanged with units referred to in the said clause or the carrying amount of the shares at the time of exchange where such shares are carried at a value other than the cost through profit or loss account, as the case may be; XXXXX
Less : Following items (if they are credited to the P & L A/c)
Amount withdrawn from any reserve or provision if credited to P&L account (**) (XXXXX)
Incomes which are exempt under section 10 [other than section 10(38)] section 11 and section 12 (XXXXX)
Amount of depreciation debited to P&L account (excluding the depreciation on revaluation of assets) (XXXXX)
Amount withdrawn from revaluation reserve and credited to P&L account to the extent it does not exceed the amount of depreciation on revaluation of assets (XXXXX)
The amount of income, being the share of the taxpayer in the income of an association of persons or body of individuals, on which no income-tax is payable in accordance with the provisions of section 86, if any such
amount is credited to the profit and loss account XXXXX
[As amended by Finance Act, 2016]
The amount of income accruing or arising to a taxpayer being a foreign company, from :
(a) the capital gains arising on transactions in securities; or
(b) the interest, royalty or fees for technical services chargeable to tax at the rate or rates specified in Chapter XII
if such income is credited to the profit and loss account and the income tax payable on above income is less than the rate of MAT. XXXXX
The amount (if any, credited to the profit and loss account ) representing
(a) notional gain on transfer of a capital asset, being share of a special purpose vehicle to a business trust in exchange of units allotted by that trust referred to in clause (xvii) of section 47; or
(b) notional gain resulting from any change in carrying amount of said units; or
(c) gain on transfer of units referred to in clause (xvii) of section 47,
The amount representation notional gain on transfer of units referred to in clause (xvii) of section 47 computed by taking into account the cost of the shares exchanged with units referred to in the said clause or the carrying
amount of the shares at the time of exchange where such shares are carried at a value other than the cost through profit or loss account, as the case may be; XXXXX
Income by way of royalty in respect of patent chargeable to tax under section 115BBF XXXXX
Amount of brought forward loss or unabsorbed depreciation, whichever is less as per books of account (XXXXX)
Profits of a sick industrial company till its net worth becomes zero/positive (XXXXX)
Deferred tax, if credited to P&L account (XXXXX)
Book profit to be used to compute MAT XXXXX
Regards,
Abhishek
9911958483
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