Is dividend income taxable under mat?

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Lets say, a pvt ltd company has revenue of 50 lakhs of which 45 lakhs is business income and 5 lakhs is dividend income from debt mutual fund. Total expenses are 45 lakhs. Since dividend income is not taxable in the hands of the investor, the company will pay no tax. However, will this situation result in tax if calculated using MAT / Book Profit?

Thanks.

Replies (9)

As per section  115JB of the oncome tax act  your company has  to add back dividends paid or proposed  in your profit  while calculating book proft  for  MAT .

Thanks for the reply. Please note that I am not referring to dividend payable by the pvt ltd company. I am referring to dividend income received by the company from its surplus funds parked in dividend paying mutual funds.

Dividend Income which is exempt under section 10(34) shall not be added for computing book profit under section 115JB. Hence, dividend income of 5 Lac shall not attract MAT.
Dividend income which is exempt under section 10(34) shall not be added for computing book profit under section 115JB. Dividend income of 5 Lac, being exempt income shall not attract MAT.
Dividend income which is exempt under section 10(34) shall not be added for computing book profit under section 115JB. Dividend income of 5 Lac, being exempt income shall not attract MAT.
Dividend income which is exempt under section 10(34) shall not be added for computing book profit under section 115JB. Dividend income of 5 Lac, being exempt income shall not attract MAT.
Dividend income which is exempt under section 10(34) shall not be added for computing book profit under section 115JB. Dividend income of 5 Lac, being exempt income shall not attract MAT.
Dividend income which is exempt under section 10(34) shall not be added for computing book profit under section 115JB. Dividend income of 5 Lac, being exempt income shall not attract MAT.
Dividend income which is exempt under section 10(34) shall not be added for computing book profit under section 115JB. Dividend income of 5 Lac, being exempt income shall not attract MAT.

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