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Relaxation in provisions relating to levy of MAT in case of cos. against whom application for corporate insolvency resolution process

Capital Market 

The existing provisions of section 115JB of the Income-Act, 1961 ('the Act'), inter alia, provide, that, for the purposes of levy of Minimum Alternate (MAT) in case of a company, the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account shall be reduced from the book profit.

In this regard, representations have been received from various stakeholders that the companies against whom an application for corporate insolvency resolution process has been admitted by the under section 7 or section 9 or section 10 of the Insolvency and Bankruptcy Code, 2016 ('the IBC'), are facing hardship due to restriction in allowance of brought forward loss for computation of book profit under section 115JB of the Act.

With a view to minimize the genuine hardship faced by such companies, it has been decided, that, with effect from Assessment Year 2018-19 (i.e.

Financial Year 2017-18), in case of a company, against whom an application for corporate insolvency resolution process has been admitted by the under section 7 or section 9 or section 10 of 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.

Appropriate legislative amendment in this regard will be made in due course.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, January 08 2018. 10:36 IST
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