Minimum Alternate Tax Calculation

Minimum Alternate Tax Calculation MAT Calculation

Example Minimum Alternate Tax Calculation:

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Example Profit and Loss Account for the year ended 31.03.2012

Particulars Rs. In Crores Rs. In Crores
Income: -
Sale - Manufactured Product 960.30
Sale - Agricultural Produce 100.25
Profit on sale of Fixed Asset 1.05
Profit on Sale of BSE Listed Equity Shares 3.50
Revaluation Reserve (on Depreciable Asset) 4.00
Other Income 1.00
---------
1,070.10
Less: - Expenditure: -
Manufacturing Expenses 575.25
Agricultural Expenses 60.50
General Administration Expenses(includes provision for unascertained liabilites - Rs.2.40 Crores) 48.40
Provision for Impairment of Fixed Asset 12.00
Interest & Finance Cost 250.00
Depreciation (includes Depreciation provided on Revalued Amount - Rs.2.00 Crores) 12.00
Provision for Loss of Subsidiary 5.00
---------
963.15
---------
Net Profit before Tax 106.95
Less: - Current Tax (including Education Cess and interest paid) as per IT Act 15.03
Deferred Tax 25.00
---------
40.03
---------
Net Profit after Tax 66.92
Add: - Opening Balance of P&L Account (including Unabsorbed Depreciation of Rs.30 Crores) (50.00)
Transfer from Bad Debt Reserve 10.00
---------
26.92
Less: Appropriation: -
Transfer to General Reserve 15.00
Proposed Dividend 10.00
Dividend Distribution Tax 1.62
---------
26.62
---------
Balance in Profit and Loss Account 0.30
---------

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Book Profit Calculation

Particulars Rs. In Crores Rs. In Crores
Balance in Profit and Loss Account 0.30
Add: -
Income Tax
* Current Tax (including Education Cess and Interest Paid) 15.03
* Dividend Distribution Tax 1.62
Transfer to Reserves
* General Reserve 15.00
Provision for Unascertained Liability 2.40
Provision for Loss of Subsidiary 5.00
Proposed Dividend 10.00
Expenditure related to Exempt Income
* Agricultural Expenses 60.50
Depreciation (including relating to Revalued Amount) 12.00
Deferred Tax 25.00
Provision for Diminuition in Value of Asset (Impairment Provision) 12.00
---------
158.85
Less: -
Amount withdrawn from Reserve
* Bad Debt Reserve (assumed not allowed while calculating Book Profit, hence to be deducted now) 10.00
Profit on Sale of Fixed Assets (not eligible for deduction, since not specifically mentioned under the deductible items of Section 115JB. However, if any amount within this is exempt under section 10, then deductible to that extent) ---
Income Exempt under section 10 or 11 or 12: -
* Agricultural Income [Exempt under Section 10(1)] 100.25
* Profit on Sale of BSE Listed Shares [Exempt u/se 10(38)] - Not Allowed ---
Amount withdrawn from Revaluation Reserve (to the extent of Depreciation Charged on Revalued Amount) 2.00
Lower of Following: -
* Book Business Loss - Rs.20 Crores
* Book Unabsorbed Depn. - Rs.30 Crores
20.00
---------
132.25
---------
26.60
---------

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Minimum Alternate Tax Calculation

Tax @ 18.50% on Book Profit 4.92
Add: - Education Cess @ 3% 0.15
------
Minimum Alternate Tax Liability 5.07
------

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Income Tax Payable

Current Tax as per IT Act (assumed to be as per Normal Total Income and Normal Tax Rate) 15.03
Minimum Alternate Tax Liability 5.07
Tax Liability (whichever is higher) 15.03

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