Get an expert at affordable price

Minimum Alternate Tax (MAT)

MAT (Minimum Alternate Tax)is introduced under direct taxation to limit the amount of deductions / exemptions allowed during computation of tax payable by the companies. FORM 29B MAT on Companies.

Section 115JB – MAT

Section 115JB was introduced regarding Minimum Alternative Tax (MAT) from AY 2001-02 onwards. MAT is applicable on companies both domestic and foreign companies.

What is MAT rate?

MAT rate is 15% of book profit is payable plus applicable surcharge and HEC (Health and education cess).

For example, if the book profit of the company is Rs 10 Lakhs, then MAT is required to be paid at the rate of 15% amounting Rs 1.50 Lakhs plus applicable surcharge and higher education cess of 4%

FORM 29B MAT on Companies

Every company should furnish Form 29B to Income Tax department to which section 115JB applies. A report from Chartered Accountant should be obtained certifying the book profit has been computed in accordance with the provisions of section 115JB.

CONTENTS OF FORM 29B FORM 29B MAT ON COMPANIES

The contents of form no. 29B is as follows:

• Report under section 115JB of the Income-tax Act, 1961 for computing the book profits of the company.
• Part ‘A’ – General details – applicable to all companies
  • Name of the assessee.
  • Address.
  • Permanent Account Number.
  • Assessment year.
  • Financial year adopted by the company under the
  • Companies Act, 2013 (18 of 2013).
  • Total income of the company under the Act.
  • Income-tax payable on total income.
• Part ‘B’ – Details of the amount required to be increased or decreased in accordance with sub-section (2A) of section 115JB
• Part ‘C’ – Details of the amount required to be increased or decreased in accordance with sub-section (2C) of section 115JB

PURPOSE OF FORM 29B

The purpose of form no. 29B is to ensure smooth claim of MAT credit in subsequent years

FORMAT OF FORM 29B MAT ON COMPANIES

The format of Form No. 29B is as follows:

FORM NO.29B

INCOME-TAX RULES, 1962

[See rule 40B]

Report under section 115JB of the Income-tax Act, 1961 for computing the book profits of the company

1. I/We*  have examined the accounts and records of (name and address of the assessee with PAN)                                       engaged in business of (nature  of  business)  in  order  to  arrive  at  the  book  profit  during  the  year  ended  on  the 31st March,     .
2. I/We*certify that the book profit has been computed in accordance with the provisions of this section. The tax payable under section 115JB of the Income-tax Act in respect of the  assessment  year  (……………) is Rs., which has been determined on the basis of the details provided  in  Annexure appended to this Form.
3. In my/our*opinion and to the best of my/our* knowledge and according to the explanations given to me/us* the particulars given in the Annexure are true and correct.

Place:

Date:

(Signature and Stamp/Seal of the Accountant)

Name of the Signatory:

Full Address:

Membership No:

1. *Delete whichever is not applicable.
2. This report is to be given by a chartered accountant, within the meaning of the Chartered Accountants Act, 1949 (38 of 1949), who holds a valid certificate of practice under sub-section (1) of section 6 of that  Act and is not a person referred to in clause (a) or clause (b) of the Explanation below sub-section (2) of section 288.
3. Where any of the matter stated in this report is answered in the negative or with a  qualification, the  report shall state the reasons therefor.

ANNEXURE

[See paragraph 2]

Details relating to the computation of Book Profits for the purposes of section 115JB of the Income-   tax Act, 1961

Part A

General – Applicable to all the companies

Sl. No	Particulars
1.	Name of the assessee.
2.	Address.
3.	Permanent Account Number.
4.	Assessment year.
5.	Financial year adopted by the company under the Companies Act, 2013 (18 of 2013).
6.	Total income of the company under the Act.
7.	Income-tax payable on total income.
8.	Whether   statement   of   profit   and   loss is  prepared                                                                             in accordance with the provisions of Schedule III to the Companies Act, 2013 (18 of 2013).		Yes / No
9.	Where the financial year referred to in Sl. No. 5 above is same as the relevant previous year, whether the statement of profit and loss referred to in Sl. No. 8 above has followed the same accounting policies, accounting standards for preparing the statement of profit and loss and the same method of rates for calculating depreciation as have been adopted for preparing accounts laid before the company at its annual general meeting? If not, the extent and nature of variation be specified (attach working separately, where required).		Yes / No / Not Applicable
10.	Where the financial year referred to in Sl. No. 5 is not the same as the relevant previous year, whether the statement of profit and loss referred to in Sl. No. 8 above has followed  the same accounting policies, accounting standards for preparing the statement of profit and loss and the same method of rates for calculating depreciation as have been adopted for preparing accounts for the respective parts of the financial year laid or to be laid before the company at its annual general meeting? If not, the extent and nature of variation be specified (attach working separately, where required).		Yes / No / Not Applicable
11.	Profit according to statement of profit and loss referred to in Sl. No. 8 above as adjusted by the amount or aggregate of amounts on account of variations referred to in Sl. No 9 or Sl. No. 10, as the case may be.
12.	Add: Amount or aggregate of amounts referred to in clauses (a) to (k) of Explanation 1 to sub-section (2) of this section (attach working separately, where required).
13.	Less: Amount or aggregate of amounts referred to in clauses (i) to (viii) of Explanation 1 of sub-section (2) of this section (attach working separately, where required).
14.	Add/(Less): Amount of adjustments as referred to in sub- section (2A) of this section where the financial statements of the company are drawn up in compliance with the Indian Accounting Standards specified in Annexure to the Companies (Indian Accounting Standards) Rules, 2015 for the previous year or any part thereof(amount from Sl. No 26 of Part B).

Sl. No	Particulars
15.	Add/(Less): Amount of adjustments as referred to in sub-section (2C) of this section where the financial statements of the company are drawn up in compliance with the Indian Accounting Standards specified in Annexure to the Companies (Indian Accounting Standards) Rules, 2015 for the previous year or any part thereof (amount from Sl. No 33 of Part C).
16.	Add/(Less): Amount or aggregate of the amounts referred to in the sub-clauses (B) to (E) of clause (iii) of Explanation to sub-section (2C) of this section for the previous year or any of the preceding previous years and relatable to such asset or investment retired, disposed, realised or otherwise transferred during the previous year (attach working separately, where required).
17.	Add/(Less): Amount or aggregate of the amounts referred to in the sub-clause (F) of clause (iii) of Explanation to sub- section (2C) of this section for the previous year or any of the preceding previous years and relatable to such foreign operations is disposed or otherwise transferred during the previous year (attach working separately, where required).
18.	Book profit as computed according to Explanation 1 given in sub-section (2) read with sub-sections (2A), (2B) and (2C) (total of Sl. No. 11 to 17).
19.	18.5 per cent of “book-profit” as computed in Sl. No. 18.
20.	In case income-tax payable by the company referred to at Sl. No. 7 is less  than  18.5 per cent of its book profits  shown  in Sl. No. 18, the amount of income-tax payable by the company would be 18.5 per cent of Sl. No. 18, i.e., as per Sl. No 19.

Part B

Details of the amount required to be increased or decreased in accordance with sub-section (2A) of section 115JB

[Applicable only where the financial statements of the company are drawn up in compliance with the Indian Accounting Standards specified in Annexure to the Companies (Indian Accounting Standards) Rules, 2015 for the previous year or any part thereof]

Sl. No	Particulars
21.	Year of convergence as defined in clause (i) of Explanation to sub-section (2C) of this section.
22.	Convergence date.
23.	Total amount credited to the other comprehensive income in the statement of profit and loss.
24.	Total amount debited to the other comprehensive income in the statement of profit and loss.
25.	Increase or decrease referred to in sub-section (2A) of this section
25 (i)	increase on account of amounts credited to other comprehensive income under the head “Items that will not be re-classified to profit or loss”.
25 (ii)	decrease on account of amounts debited to other comprehensive income under the head “Items that will not be re-classified to profit or loss”.

25 (iii)	increase on account of amounts or aggregate of amounts debited to the statement of profit and loss on distribution of non-cash assets to shareholders in a demerger in accordance with Appendix A of the Indian Accounting Standard 10.
25 (iv)	decrease on account of amounts or aggregate of amounts credited to the statement of profit and loss on distribution of non-cash assets to shareholders in a demerger in accordance with Appendix A of the Indian Accounting Standard 10.
25 (v)	Sub-total [(i) –(ii) + (iii) – (iv)]
25 (vi)	Increase or decrease on account of amount of revaluation surplus of assets included in item (i) or (ii) above.
25 (vii)	Increase or decrease on account of amount of gains or losses from investments in equity instruments designated at fair value through other comprehensive income in accordance with Indian Accounting Standards 109 included in item (i) or (ii) above.
25 (viii)	Increase or decrease on account of amount or aggregate of the amounts referred to in the first proviso of sub-section (2A) of this section for the previous year or any of the preceding previous years and relatable to such asset or investment retired, disposed, realised or otherwise transferred during the previous year.
26	Total [ (v) to (viii)] (amount to be carried to Sl. No. 14 of Part A.).

Part C

Details of the amount required to be increased or decreased in accordance with sub-section (2C) of section 115JB

[Applicable only where the financial statements of the company are drawn up in compliance with the Indian Accounting Standards specified in Annexure to the Companies (Indian Accounting Standards) Rules, 2015 for the previous year or any part thereof]

[To be filled up for the year of convergence and each of the following four previous years only]

Sl. No.	Particulars
27.	Year of convergence as defined in clause (i) of Explanation to sub-section (2C) of this section.
28.	Convergence date.
29.	Amount or the aggregate of the amounts adjusted in the other equity (including capital reserve and securities premium reserve).
30.	To be increased or decreased by:-
30 (i)	amount or aggregate of amounts adjusted in Capital reserve.
30 (ii)	amount or aggregate of amounts adjusted in Securities premium reserve.
30 (iii)	amount or aggregate of amounts adjusted in the other comprehensive income on the convergence date which shall be subsequently reclassified to profit or loss.
30 (iv)	amount    or    aggregate    of    amounts    adjusted                 in Revaluation surplus for assets in accordance with the Indian Accounting Standards 16 and Indian Accounting Standards 38 adjusted on the convergence date.

30 (v)	gains or losses from investment in equity instruments designated at fair value through other comprehensive income    in    accordance    with    Indian                 Accounting Standards 109 adjusted on the convergence date.
30 (vi)	adjustments relating to items of property plant and equipment and intangible assets recorded at fair value as deemed cost in accordance with paragraphs D5 and D7 of the Indian Accounting Standards 101 on the convergence date.
30 (vii)	adjustments relating to investments in subsidiaries, joint ventures and associates recorded at fair value as deemed cost in accordance with paragraph D15 of the Indian Accounting Standard 101 on the convergence date.
30 (viii)	adjustments relating to cumulative translation differences of a foreign operation in accordance with paragraph D13 of the Indian Accounting Standard 101 on the convergence date.
30 (ix)	any other adjustment (to be specified).
31.	Total [29 +/ (-) 30 (i) to (ix)].
32.	1/5th of the Sl. No 31(amount to be carried to Sl. No. 15 of Part A).
33.	Details of adjustment for transition amount.
33 (i)	Total transition amount.
33 (ii)	Amount or aggregate of amounts adjusted till immediately preceding year.
33 (iii)	Amounts adjusted in this year.
33 (iv)	Amount to be adjusted in the subsequent year(s)

FORM 29B MAT on Companies

Also read:

• Depreciation Income Tax
• Depreciation Companies Act
• Cost Inflation Index
• Download TAN Allotment
• TRACES – Install Emsigner