Income Tax

Company under corporate insolvency resolution process given relied under MAT

Company under corporate insolvency resolution process given relied under MAT – Total loss brought forward shall be allowed to be reduced from book profit 

Government  has granted relaxation in the provisions relating to levy of Minimum Alternate Tax (MAT) in case of companies against whom an application for corporate insolvency resolution process has been admitted under the Insolvency and Bankruptcy Code, 2016.

As per existing provisions of Sec 115JB of IT Act,1961, wrt 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 for levy of Minimum Alternate Tax (MAT).

Representations were received from stakeholders that companies against whom application for corporate insolvency resolution process has been admitted by Adjudicating Authority were facing hardship due to restriction in allowance of brought/forward loss.

To reduce hardship,it has been decided that wef AY 2018-19 in case of company where application for corporate insolvency resolution process has been admitted u/s 7/9/10 of IBC,amt.of total loss brought forward shall be allowed to be reduced from book profit for purposes of levy of MAT

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