MINIMUM ALTERNATIVE TAX CALCULATION PROCEDURE?

Briefly I will mention seven points: 1. Every company required to compute tax both under the income tax and under sec 115 JB 2. Profit computed under the income tax is called regular profit and the tax under this method is called regular tax 3. Profit computed under sec 115JB is called Book profit and the tax computed is called MAT. 4. Every year a company required to compute the tax under the both methods and required to pay higher of those. 5. The company which has paid the MAT in any year can carryforward to the next subsequent years to setoff against the tax liability in which it pays the regular tax. 6. However a company is not required to compute its book profit and pay the MAT in the in year in which it has its regular profit itself “nil” or “loss” . For example , when MAT has not been paid. But the MAT paid in the earlier years is eligilble to be carryforward. 7. There are some conditions how much MAT can be carryforward and how much MAT can be utilized to sett off the tax. Company’s responsibility is to ensure compliance of the provisions of section 115JB is primarily the responsibility of the company. Therefore, the company should prepare statement of its liability under section 115JB duly authenticated, giving details and the basis of all the adjustments made and submit the same to the accountant for verification and certification after such examination as he may deem proper. The company should also make available to the concerned ,all the books of account, records and other documents as may be deemed necessary for carrying out the audit.