22 April 2010
Suppose in a company, gross profit is 50000( purchase 100000, sale 200000,& manufacturing exp. 50000/-)- and 40000(including 20000/- as dividend)/- is office exp, so net profit will be 10000/- If I am not wrong then income tax will be 3000+300, then kindly tell me here dose MAT is applicable? If yes then what will be the correct tax,
22 April 2010
Dividend will not be allowable as deduction under income tax act while computing income. So income as per IT Act will be Rs. 30,000/- (10+20div) and hence tax would be Rs. 9000 + 270 = 9270/-.
Book profits as per MAT would also be Rs. 30000 and MAT would be Rs. 4500 + 135 = 4635/-. Since income tax as per normal rates higher than MAT normal income tax payable.
Also surcharge applicable if income excees Rs. 1 cr.
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