Mat Calculation As Per Ind As

Under existing rules book profit is calculated as per section 115jb of the income tax act 1961.

Mat calculation as per ind as. Hence the transition amount will be adjusted 1 5 th each year in 2017 18 to 2021 22. Then the transition amount will be adjusted under mat equally in five consecutive years starting from 2017 18. Calculation of book profits for the purpose of mat maximum alternate tax section 115jb for computation of book profit one may proceed as follows. Any loss arising out of fair value adjustments of financial instruments measured at fair value.

Mat is applicable to all companies including foreign companies. The starting point for mat computation is profit before other comprehensive income oci and not the total comprehensive income. Para 11 of appendix a to ind as 10 provides that any distributions of non cash assets to shareholders for example in case of a demerger shall be. Since income exceeds 1 crore marginal relief is to be calculated i e.

As per ind as 101 a company would make all ind as adjustments on the opening date of the comparative financial year. Clause c and d of section 115 2a and section 115 2b have to be read in conjunction to understand the calculation of mat in a scheme of demerger of companies that are following ind as. Every company should pay higherof the tax calculated under the following two provisions. Mat on ind as compliant financial statement i for mat calculation the starting point is the net profit as per the statement of profit and loss before considering any items forming a part of other comprehensive income oci.

Xyz limited is adopting indian accounting standards ind as for the first time in financial year 2017 18. As per the concept of mat the tax liability of a company will be higher of the following. Tax liability of the company computed as per the normal provisions of the income tax law i e tax computed on the taxable income of the company by applying the tax rate applicable to the company. Minimum alternate tax calculation example.

The taxable income of abc company not availing any tax exemptions incentives as per the provisions of the income tax act 1961 is rs. Summary of clarifications issued by the cbdt on the mat provisions applicable to ind as reporters. The entity is also required to present an equity reconciliation between previous indian gaap and ind as amounts both on the opening date of preceding year as well as on the closing date of the preceding year. The amount of tax and surcharge cannot exceed the tax calculate under marginal relief.

This article discusses the amendments made to section 115jb to incorporate adjustments as mandated by ind as. Mat is calculated as 15 of the book profit of the tax assesse. Mat is calculated under section 115jb of the income tax act.