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What is MAT tax ? where it is applied? where will the sensex market go? |
What is MAT tax ? where it is applied? where will the sensex market go? You have asked two different questions: A) What is mat? Well MAt means Minimum Alternate Tax. The provision is applied on Companies. It says that even if a company may not have taxable income under I T Act , it still have to pay tax on the profit computed in prescribed manner if the company has profit under companies Act. The tax has to be paid at the rate of 10% now (7.5% )on Book Profit. You should also understand why this MAT came into being. Reliance Industries is a very good example. In late nineties, RIL was having huge profits even then it was not paying taxes because the total income computed under I T Act was always a loss. That was because of high Depreciation on plants and machinery on ongoing projects. So that became a too; in many a profitable companies to lower the taxes. The govt then brought MAT. B) As far as the Sensex rise is concerned, only God knows where will it go. But as the market and world thinks, it will go higher and higher. # The Minimum Alternate Tax (MAT) on companies, which was introduced last year, has been the subject of extensive debate. A large number of representations have been received to repealor reviewthe provisions. The economic rationale for MAT has, I am afraid, not been altered and I am unable to accept the request that the provision introduced last year be totally withdrawn. However, there is a case for a review of the manner in which the tax is charged and collected. I, therefore, propose to make the following changes in the provisions of MAT :- * Export profits will be exempt from MAT and will be eligible for full deduction under section 80HHC. * A system of credit will be introduced in respect of the payment of MAT. When a company pays MAT, the tax credit earned by it shall be allowed to be carried forward for a period of 5 assessment years and, in the assessment year when regular tax becomes payable, the difference between the regular tax and tax computed under MAT for that year will be set off against the MAT credit available. Thus, at the proposed new rate of corporate tax, every company including the zero tax companies, would have to pay income-tax of not less than 10.5 per cent on its book profits. http://indiabudget.nic.in/ub1997-98/bs/b... MAT tax liability under section 115JB can be worked out by undergoing the following steps : 1. Compute the total income of the company (ignoring the provisions of section 115JB). 2. Compute the income-tax payable on total income is worked out under (i) above. 3. Work out the Book Profit under the provisions of section 115JB. 4. Calculate 7 陆 per cent of book profit (as per provisions of section 115JB). 5. MAT tax liability as worked out under (iv) above would be the tax payable if it is more than the amount of tax worked out (ii) above. http://www.citcindia.org/mat_proc.htm... http://indiabudget.nic.in/ub1997-98/bs/b... http://www.citcindia.org/mat_proc.htm... money added tax.for more details select my answer as the best answer. indian tax office |
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