MAT Calculation of Book Profit
This query is : Resolved
06 September 2008
If we take PBT for computation of Book profit, then shall we have to deduct Deferred Tax Liability from PBT or Not ?Please mention reasons..
08 September 2008
For calculation of Book Profit for the purpose of MAT, we just take Profit under the Profit & Loss A/c and make some adjustment as mentioned u/s 115J.
If you pick PAT from the profit and loss a/c then only you will be required to make adjustment for tax.
The format under Profit & Loss A/c is as follows:
Profit before Tax: xxxx
Provision for
- Income Tax xxx
- Fringe Benefit Tax xxx
- Deferred Tax xxx
-----
Profit after Tax: xxxx
So, if you have taken PAT, then only you will add(Subtract) back deferred tax liability(Deferred tax asset), otherwise there is no need to make any adjustment.
If you pick PAT from the profit and loss a/c then only you will be required to make adjustment for tax.
The format under Profit & Loss A/c is as follows:
Profit before Tax: xxxx
Provision for
- Income Tax xxx
- Fringe Benefit Tax xxx
- Deferred Tax xxx
-----
Profit after Tax: xxxx
So, if you have taken PAT, then only you will add(Subtract) back deferred tax liability(Deferred tax asset), otherwise there is no need to make any adjustment.
08 September 2008
Thanks Miss Reetika .
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