What is Section 115JB?
As per section 115JB, every taxpayer being a company is liable to pay MAT, if the Income- tax(including surcharge and cess) payable on the total income, computed as per the provisions of the Income-tax Act in respect of any year is less than 15% of its book-profit + surcharge (SC) + health & education cess.
Is it compulsory to file Form 29B? Every Company where the income is less than 15% of the book profit (with effect from AY 2020-21) is required to obtain a report from a Chartered Accountant in Form 29B.
What is book profit as per mat?
As per Section 115JB (2), book profit means net profit in the statement of profit and loss prepared in accordance with Schedule III of the Companies Act, 2013. A number of costs/income are considered along with the profit and loss statement when calculating the book profit of a company.26-Apr-2021
How to calculate MAT? MAT is equal to 15% with effect from AY 2020-21(18.5% prior to AY 2020-21) of Book profits (Plus Surcharge and cess as applicable).04-May-2021
What is Mat tax with example?
MAT is a tax levied under Income Tax Act of India, 1961. For Example: There are several "zero tax companies" that book high profit but pay almost nil taxes by rolling out substantial dividends to their shareholders.
2) Special provision for payment of tax by certain companies.
Are you liable to report under 115JB?
6.1 The audit report under section 115JB(4) is required to be given in Form No. 29B as per Rule 40B of the Income-tax Act, 1961 which requires certification by the accountant that the book profit and tax payable thereon have been computed in accordance with provisions of section 115JB.
As per the mandate of section 92E, the assessee had to obtain the Audit Report and file it before the due date for filing return. Section 271BA provides for a penalty of ` 1,00,000 for failure to follow the mandate of section 92E.
Why form 29B is filed?
Form 29B enables Companies to disclose book profits certified by a CA for a particular assessment year as per the provisions laid down under section 115JB of the Income Tax Act, 1961. This form can be filed in both online and offline mode.
MAT is applicable for all companies except for companies involved in the life insurance business. MAT is considered payable only if tax applicable as per normal provisions of the Act is lesser than 18.5% of book profits.
What is the purpose of mat?
The objective behind MAT or Minimum Alternate Tax is to facilitate taxation of "zero tax companies", by making such companies liable to pay a minimum tax based on their book profit. This form of tax is applicable to all companies, including foreign companies that have established their presence in India.
15%
What is the current MAT rate?
In September 2019, the government reduced the MAT tax rate from 18.5 per cent to 15 per cent while also slashing the corporation tax rate to 22 per cent from 30 per cent. MAT is levied on book profit, unlike normal corporation tax, which is levied on taxable profit.
The Finance Act, 2012 inserted sub-section (5A) in section 115JB with retrospective effect from assessment year 2001-02. Sub-section (5A) provides that MAT shall not apply to any income accruing or arising to a company from life insurance business referred to in section 115B.23-May-2022
Why book profit is calculated?
Book profits refer to the profit earned by the business entity from its operations and activities. They are calculated by deducting all the business expenses incurred within a financial year from all the sales revenue and other income generated from selling goods & services within that same financial year.
Minimum Alternate Tax or MAT is a provision that is in direct tax laws which is for companies, it is the provision for limit the tax exemptions which is availed by the companies. The provision requires that the company shall not avail more exemption and they should pay at least minimum amount of tax to the government.01-Nov-2021
Who is specified employee?
For purposes of Section 409A of the Internal Revenue Code (Code) (Section 409A), a specified employee is a key employee of a publicly traded company. Specified employees are generally employees that satisfy any of the following conditions: They own more than 5% of their employer's stock.
Amount of any expenses relating to exempt income under sections 10,11,12 (except sec 10(38). This means long term capital gain exemption under section 10(38) are subject to MAT.05-Apr-2022
What is book profit of a company?
profit that has been made but that has not yet been taken, for example when shares have risen in value since they were bought but have not yet been sold: If the land was revalued and stated in the balance sheet at its current market price, this would result in the company making a book profit.17-Aug-2022
Specified employees are company directors, employees with substantial interest in the company and any other employee whose salary income exclusive of non-monetary benefits and amenities exceeds Rs. 50,000/-. 3) Any sum paid by employer in respect of an obligation, which was actually payable by the assessee.
What is book profit and taxable profit?
Book income is used by companies to report their income and expenses to shareholders. Taxable income is used by businesses to report earnings and tax liability to tax authorities.
What is Section 115JB?