Taxation & Assessment of Company

1. Purpose of Section 115JAA Allows companies to claim creditfor excess MAT paid (when MAT > normal tax) in subsequent years where normal tax liability exceeds MAT. Prevents double taxation and ensures fairness for companies subject to MAT. 2. Eligibility for MAT Credit Applies only if: Company has paid MAT under Section 115JBin any previous year. Normal tax liability(under regular […]

Section 115JB(2) mandates that the Statement of Profit & Loss (P&L) for MAT computation must be prepared as per Schedule III of the Companies Act, 2013, with specific adjustments. Below is a structured breakdown: 1. Legal Requirement Companies must compute “Book Profit”for MAT (Minimum Alternate Tax) based on: Net Profit(as per P&L prepared under Companies Act, 2013). Adjustments(additions/deductions) as prescribed in Section 115JB(2).

Section 115JB mandates that companies calculate Minimum Alternate Tax (MAT) based on book profits (derived from financial statements) rather than taxable income. Below is a step-by-step guide to computing book profit, including adjustments under Explanation 1 to Section 115JB(1) & (2). 1. Legal Basis Section 115JB(1): Defines MAT liabilityas 15% of book profit (plus surcharge & cess). Explanation 1 to Section 115JB(2): Specifies adjustmentsto net profit for computing

Under Explanation 1(iii) to Section 115JB(2), companies can deduct the lower of: Brought forward losses(as per books), or Unabsorbed depreciation(as per books) from the net profit while computing book profit for MAT (Minimum Alternate Tax). 1. What Qualifies for Deduction? Only losses/depreciation recorded in the books(not as per Income Tax Act). Lossesmust be carried forward in the balance sheet. Unabsorbed depreciationmust be not adjusted in previous years.

Section 115JB(4) of the Income Tax Act, 1961, mandates that companies liable for Minimum Alternate Tax (MAT) must submit a Chartered Accountant (CA)-certified report in Form No. 29B. This report confirms the accuracy of book profit computation for MAT. Below are the key provisions: 1. When is the Report Required? All companies(including foreign companies with PE in India) liable for MAT must file Form 29B. Exemptions: Companies

Under the Income Tax Act, 1961, Sections 115QA to 115QC impose a tax on distributed income when a domestic company buys back its own shares from shareholders. This provision was introduced to prevent tax avoidance through buyback schemes. 1. Applicability (Section 115QA) ✅ Applies to: Domestic unlisted companiesbuying back their own shares. Listed companiesif buyback is not through open market (i.e., tender offers). ❌ Does not