Provisions of MAT for payment of tax by certain companies (Section 115JB]
Tax payable for any assessment year cannot he less than 15% of book profit: Where in the case of a company, the income-tax payable on the total income as computed under the Income-tax Act, is less than15% of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income (book profit) shall be the amount of the income-tax at the rate of 15%.
Allowing tax credit in respect of tax paid on deemed income under MAT provisions against tax liability in subsequent years (Section 115JAA]
Where any amount of tax is paid under section 115J B (1) of Income Tax Act by a company for any assessment year beginning on or after 1-4-2006, credit in respect of the taxes so paid for such assessment year shall be allowed on the difference of the tax paid under section 115J8 of Income Tax Act and the amount of tax payable by the company on its total income computed in accordance with the other provisions of the Act.
The amount of tax credit so determined shall be allowed to be carried forward and set off in a year when the tax becomes payable on the total income computed under the regular provisions. However, no carry forward shall be allowed beyond the seventh assessment year immediately succeeding the assessment year in which the tax credit becomes allowable.… Read the rest