CBDT issues FAQs on computation of book profit | KPMG | IN

CBDT issues FAQs on computation of book profit for levy of MAT and proposes amendment to Section 115JB

CBDT issues FAQs on computation of book profit

The Finance Act, 2017 provided a separate formulae for computation of book profit for the companies that prepare financial statements under Ind AS.

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Background

The Finance Act, 2017 provided a separate formulae for computation of book profit for the companies that prepare financial statements under Ind AS. Accordingly, Minimum Alternate Tax (MAT) would be calculated using the profits as per the statement of profit and loss before Other Comprehensive Income (OCI), as the starting point. The Finance Act, 2017 also provides certain adjustments to book profits for MAT computation.

New development

The Central Board of Direct Taxes (CBDT) received a number of queries on various aspects of computation of MAT under Ind AS.  These matters were referred to an expert committee.  On 25 July 2017, CBDT issued clarifications in the form of Frequently Asked Questions (FAQs) on issues relating to the levy of MAT for Ind AS compliant companies along with the proposed amendment in the IT Act. 

This issue of IFRS Notes provides an overview of the following: 

  • Clarifications in the form of Frequently Asked Questions (FAQs) on issues relating to the levy of MAT for Ind AS compliant companies
  • Proposal for amendment to Section 115JB of the IT Act in relation to Ind AS compliant companies.
  • CBDT circular no. 24/2017 dated 25 July 2017

To access the text of the CBDT notifications on:

  • Press release to propose amendment to Section 115JB of the IT Act, please click here
  • CBDT circular 24/2017 dated 25 July 2017, please click here

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