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MAT and Exempt Income

13 June 2023

Will agricultural income be deducted from book profit while calculating income for MAT calculation? kindly explain.

thanks®ards,

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3 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178022 Points)
Replied 13 June 2023

While calculating Book Profit U/s 115 JB, while making adjustments in Book Profit, exempt income has to be Deducted in case the same is credited to the P&L A/c of the Company.

So, the agricultural income is not included for calculation of MAT.

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B Durga Prasad (Student) (175 Points)
Replied 13 June 2023

Under the provisions of the Income Tax Act in India, agricultural income is generally exempt from tax. However, when it comes to calculating the Minimum Alternate Tax (MAT), agricultural income is not deducted from the book profit. The concept of MAT was introduced to ensure that even if a company has substantial book profits, it still pays a minimum amount of tax. Agricultural income, being exempt from tax, is not considered for MAT calculations. Therefore, while determining the income for MAT purposes, agricultural income is not factored in as a deduction from the book profit.
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