Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: VAT Audit :: empanelment :: VAT RATES :: form 3cd :: cpt :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: Central Excise rule to resale the machines to a new company :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: articles on VAT and GST in India :: TDS :: ACCOUNTING STANDARDS :: due date for vat payment
 
 
« News Headlines »
 Invoking Writ Jurisdiction For Income Tax Matters
 How to file income-tax returns online
 How Income Tax Returns Are Scrutinised
 All About New Income Disclosure Scheme to make Demonetisation successful
 Your deposit may draw income tax notice
 Accepting payment under IDS 2016
 New disclosure scheme could see 50% tax and 4-year limit on cash use for unaccounted deposits
 Pay 50% tax on unaccounted deposits, or 85% if caught, says Modi government
 Deadline to pay property tax in old currency extended
 Cabinet clears amendments to Income Tax Act
 Have you got interest on your income tax refund?

MAT norms may be tweaked
February, 20th 2007

Minimum alternate tax (MAT) may be in for some structural rejig in the Budget. The government is looking at expanding the scope of the tax currently applicable on certain zero-tax companies.

The options that are being examined include expanding MAT to cover units taking benefits of the STPI scheme, to bring big IT companies into the tax net. But this will happen only if the scheme is extended. A decision in this regard will be taken at the highest level. The current thinking is in line with the finance ministrys views of reviewing exemptions.

If you look at it from the governments viewpoint, expanding the scope of MAT would help bring more tax payers into the net. From industrys viewpoint, levying MAT would not augur well without extending the tax waivers available under Section 10A to STPIs, BMR & Associates, partner, Mukesh Butani said.

While expanding the scope, the government is also exploring ways to bring in some structural changes. The Parthasarathi Shome committee had recommended that instead of taking 30% of book profit for calculation of MAT, a percentage of total turnover should be fixed. It was of the view that the criterion of book profit had let to a lot of litigation. Industry has also demanded that the government should review the decision to include long-term capital gains in the book profit. This provision was inserted last Budget.

What are zero-tax companies

Normally, a company is liable to pay tax on the income computed in accordance with the provisions of the I-T Act, but the profit and loss account of the company is prepared as per provisions of the Companies Act. There were a large number of companies who had book profits as per their profit and loss account but were not paying any tax because income computed as per provisions of the I-T Act was either nil or negative or insignificant. In such case, although the companies were showing book profits and declaring dividends to the shareholders, they were not paying any income tax. These companies were popularly known as zero-tax companies.

Why MAT

In order to bring zero-tax companies under the Income Tax Act net, Section 115J was introduced w.e.f assessment year 1988-89 to provide for payment of MAT. According to this section, if the taxable income of a company computed under this Act in respect of the previous year and onwards is less than 30% of its book profit, the total income of such company chargeable to tax for the relevant previous year shall be deemed to be an amount equal to 30% of such book profit.

How has MAT worked in India

The provision was removed in 1991-92 but reintroduced in 1997-98 under Section 115JA. The government hiked the MAT rate from 7.5% to 10% in the last Budget.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Sitemap

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions