Amalgamation:
Demerger:
Minimum Alternate Tax on companies [Section 115JB]:
Applicability of MAT: Only to Companies (including foreign/government/non-government
company)
As per sec 115JB companies have to pay tax :
Taxa as per normal provision of income tax or 15% of Book profit (Whichever is higher)
(*Foreign Company = Tax@40%)
As per provisions of section 115BAC, the provision of section 115JC relating to minimum
alternate tax will not be applicable. The accumulated MAT will lapse and will not be eligible to
be carried forward for set off in future years.
❖ Compulsory filing of return of income and furnishing of report from Chartered Accountant:
The section also provides that every company to which this section applies shall furnish, a report from a
chartered accountant certifying that the book profit has been computed in accordance with the
provisions of this section, on or before the specified date referred to in section 44AB (i.e., one month
prior to the due date for filing return of income) or in response to a notice under section 142(1)(i),
[Section 115JB(4)].
❖ Non-applicability of MAT [Section 115JB(5A)]:
The provisions of MAT u/s 115JB shall not apply
- to any income accruing or arising to a company from life insurance business referred to in section 115B.
- a company who has exercised the option under section 115BAA or section 115BAB.
MAT CREDIT:
ALTERNATE MINIMUM TAX (AMT) SECTION 115JC:
Applicability: Any person other than a company, who has claimed deduction under any section
(other than section 80P) included in Chapter VI-A under the heading “C – Deductions in respect of
certain incomes” or under section 10AA or under section 35AD would be subject to AMT [Section
115JEE(1)].
The provisions of AMT would, however, not be applicable to an individual, HUF, AOPs, BOIs, whether
incorporated or not, or artificial juridical person, if the adjusted total income of such person does
not exceed Rs 20 lakh.
Levy of AMT@18.5% on Adjusted Total Income: Accordingly, where the regular income- tax payable
by a person, other than a company, for a previous year computed as per the provisions of the
Income-tax Act, 1961 (other than Chapter XII-BA) is less than the AMT payable for such previous
year, the adjusted total income shall be deemed to be the total income of the person. Such person
shall be liable to pay income-tax on the adjusted total income @ 18.5%.
Furnishing Report by Chartered Accountant:
Such persons to whom this section applies should obtain a report in the prescribed form from a
Chartered Accountant certifying that the adjusted total income and the AMT have been computed
in accordance with the provisions of this Chapter. The report has to be furnished on or before the
specified date referred to in section 44AB (i.e., one month prior to the due date for filing return of
income), in such form as may be prescribed, from an accountant referred to in the Explanation
below section 288(2), certifying that the adjusted total income and the alternate minimum tax have
been computed in accordance with the provisions of this Chapter and furnish such report by that
date.
Levy of AMT @9%/15% of Adjusted Total Income in case of a unit located in IFSC or co-operative
society:
Where the person subject to AMT Rate of AMT
on adjusted
total income
- is a unit located in an International Financial Services Centre 9%
(IFSC) deriving its income solely in convertible foreign
exchange or
- a co-operative society 15%
Applicability of Interest and Penal provisions:
Section 115JE specifically provides that “save as otherwise provided in this Chapter, all other
provisions of this Act shall apply to a person referred to in this Chapter”. Hence, all other provisions
relating to self-assessment under section 140A, advance tax, interest under sections 234A, 234B and
234C, penalty etc. would also apply to a person who is subject to AMT.
Non-applicability of AMT provisions:
The provisions of this section shall not apply to a person:
- a resident co-operative society opting for section 115BAD or 115BAE or
- where income tax payable in respect of total income of such person is computed as per section
115BAC(1A) [Section 115JC(5)].