Amendment to [ Section-115JB ] w.e.f. Assessment Year 2019-2020 under Income Tax Act.

Section 115JB provides for levy of a minimum alternate tax (MAT) on the “book profits” of a company.

In computing the book profit, it provides, inter alia, for a deduction in respect of the amount of loss brought forward or unabsorbed depreciation, whichever is less, as per books of account Consequently, where the loss brought forward or unabsorbed depreciation is nil, no deduction is allowed. This non-deduction is a barrier to rehabilitating companies seeking insolvency resolution.

• Amendment - In view of the above, section 115JB has been amended (with effect from the assessment year 2018-19) to provide that the aggregate amount of unabsorbed depreciation and loss (excluding unabsorbed depreciation) brought forward shall be allowed to be reduced from the book profit, if a company’s application for corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 has been admitted by the Adjudicating Authority.

Consequently, a company whose application has been admitted would henceforth be entitled to reduce the loss brought forward (excluding unabsorbed depreciation) and unabsorbed depreciation for the purposes of computing book profit under section 115JB.

A clarificatory amendment is also made in section 115JB (with retrospective effect from the assessment year 2001-02) to provide that the MAT provisions shall not be applicable (and shall be deemed never to. have been applicable) to a foreign company, if its total income comprises solely of profits and gains from business referred to in sections 44B, 44BB, 44BBA and 44BBB and such income has been offered to tax at the rates specified in the said sections.

Amendment at a Glance for A.Y. 2019-20
Amendment to [Sec.-2(24)] Amendment to [Sec.-2(42A)] Amendment to [Sec.-9]
Amendment to [Sec.-16 & 17] Amendment to [Sec.-28] Amendment to [Sec.-36 & 40A]
Amendment to [Sec.-43] Amendment to [Sec.-43CA] Amendment to [Sec.-44AE]
Amendment to [Sec.-49] Amendment to [Sec.-56(2)(x)] Amendment to [Sec.-79]
Amendment to [Sec.-80AC] Amendment to [Sec.-80D] Amendment to [Sec.-80DDB]
Amendment to [Sec.-80IAC] Amendment to [Sec.-80JJAA] Amendment to [Sec.-80PA]
Amendment to [Sec.-80TTA] Amendment to [Sec.-80TTB] Amendment to [Sec.-115AD]
Amendment to [Sec.-115BA] Amendment to [Sec.-115BBE] Amendment to [Sec.-115JB]
Amendment to [Sec.-115O & 115Q] Amendment to [Sec.-115R & 115T] Amendment to [Sec.-139A]
Amendment to [Sec.-140] Amendment to [Sec.-143] Amendment to [Sec.-145A & 145B]
Amendment to [Sec.-193] Amendment to [Sec.-194A] Amendment to [Sec.-145O & 245Q]
Amendment to [Sec.-271FA] Amendment to [Sec.-276CC] Amendment to [Sec.-286]
 
 
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