Tax

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singh satish

singh satish (Querist)
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30 September 2017 What point should be added and deduct while computing book profit for MAT

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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01 October 2017 MAT is equal to 18.5% of Book profits(Plus Surcharge and cess as applicable). Book profit means the net profit as shown in the profit & loss account for the year as increased and decreased by following items: Additions to the Net Profit (If debited to P/l A/c): 1 Income Tax paid or payable if any calculated as per normal provisions of income tax act. 2Transfer made to any reserve 3 Dividend proposed or paid 4 Provision for loss of subsidiary companies 5 Depreciation including depreciation on account of revaluation of assets 6 Amount/provision of deferred tax 7Provision for unascertained liabilities e.g. provision for bad debts 8 Amount of expense relating to exempt income u/s 10,11,12 (except sec 10AA and 10(38) (It means income u/s 10AA & long term capital gain exempt u/s 10(38) are subject to MAT). Deletions to the Net Profit (If credited to P/L A/c) 1 Amount withdrawn from any reserves or provisions 2 The amount of income to which any of the provisions of section 10, 11 & 12 except 10AA & 10(38) apply. 3Amount withdrawn from revaluation reserve and credited to profit & loss account to the extent of depreciation on account of revaluation of asset. 4 Amount of loss brought forward or unabsorbed depreciation, whichever is less as per the books of account. However loss shall not include the depreciation. (if loss brought forward or unabsorbed depreciation is nil then nothing shall be deducted.) 5 Amount of Deferred Tax, is any such amount is credited in the profit & loss account 6 Amount of depreciation debited to P/l A/c (excluding the depreciation on revaluation of Assets)