minimum alternate tax
This query is : Resolved
16 July 2009
The Indian Income Tax Act contains large number of exemptions from total income. Besides exemptions, there are several deductions permitted from gross total income. Further, depreciation allowable under the Income Tax Act is not the same as required under the Companies Act. The result of such exemptions, deductions, and other incentives under the Income tax Act in the form of liberal rates of depreciation is the emergence of Zero tax companies which inspite of having high book profit are able to reduce their taxable income to nil.
The system of minimum alternate tax has accordingly been introduced under which a company is required to pay a minimum tax of 15 % of the book profit(budget 2009) in case the tax on the total income computed under the normal provisions of law works out to less than this amount [Sec 115JB].
The system of minimum alternate tax has accordingly been introduced under which a company is required to pay a minimum tax of 15 % of the book profit(budget 2009) in case the tax on the total income computed under the normal provisions of law works out to less than this amount [Sec 115JB].
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