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CBDT relaxes norms for MAT on firms facing insolvency

To minimise genuine hardships faced by affected companies, said the Central Board of Direct Taxes

Press Trust of India  |  New Delhi 

Insolvency and Bankruptcy Code, IBC, Indian banks, Lenders, Banking sector
Insolvency and Bankruptcy Code. Illustration: Ajay Mohanty

The Income Tax Department on Saturday relaxed norms for levy of Minimum Alternate Tax (MAT) on facing corporate proceedings.

According to Section 115JB of the Income Tax Act, MAT is levied on book profit after deducting the amount of loss brought forward or unabsorbed depreciation, whichever is less.

“With effect from assessment year 2018-19 (FY2017-18), in case of a company, against whom an application for corporate resolution process has been admitted by the adjudicating authority under...the IBC, the amount of total loss brought forward (including unabsorbed depreciation) shall be allowed to be reduced from the book profit for the purposes of levy of MAT under Section 115JB of the Act,” it said.

This has been done to minimise the genuine hardships faced by such companies, said the

Lenders of those companies, which have defaulted on loans, have been approaching the National Company Law Tribunal (NCLT) under the and Bankruptcy Code.

First Published: Sat, January 06 2018. 23:20 IST