Taxation Current Affairs

CBDT relaxes norms for MAT on firms facing insolvency

The Central Board of Direct Taxes (CBDT) has announced to relax norms around levy of minimum alternate tax (MAT) for insolvent companies from financial year 2017-18.

The purpose of the move is to make the Insolvency and Bankruptcy Code, 2016 more effective and minimise hardship faced by companies going in for insolvency resolution.

Minimum alternate tax (MAT)

Its aim is to bring Zero Tax Companies” into tax realm who do not pay any tax. It is ruled by provisions enclosed in section 115JB of Income Tax Act, 1961. MAT is valid to all companies comprising foreign companies. As per meaning of MAT, tax obligation of company will be higher if income tax of company calculated as per normal provision of income tax and tax calculated at 18.5% on book profit plus surcharge and cess as applicable.

Key Facts

This exemption facility will be available only for companies against whom application for corporate insolvency resolution process has been admitted by the adjudicating authority. An amendment to this effect will be made in section 115 JB of the Income Tax Act.

According to existing provisions for purposes of levy of MAT company, amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account shall be reduced from book profit. The relation of norms will allow company to reduce amount of total loss brought forward including unabsorbed depreciation from the book profit for the purposes of levy of MAR.

Background

This decision was taken based on suggestions of various stakeholders suggesting hardship faced by companies against whom application for corporate insolvency resolution process was admitted by Adjudicating Authority due to restriction in allowance of brought forward loss for computation of book profit. The Indian Banks Association (IBA) also had sought removal of MAT for new investors apprehending depressed bids.

Tags:

Income Tax Department launches on-line chat service

Income Tax (IT) Department under the Union Finance Ministry has launched an on-line chat service on its national website www.incometaxindia.gov.in with a prominent icon stating ‘Live Chat Online- ask your query’.

It was announced by Minister of State (MoS) for Finance, Shiv Pratap Shukla while replying in the Lok Sabha. Since its launch in October 2017 it has altogether benefited 8,424 people.

Key Facts

The on-line chat service is aimed at facilitating the taxpayers resolve their queries by answering their basic queries and doubts relating to direct tax issues. The facility is available on all working days from Monday to Friday between 10 AM and 6 PM.

The module can also be accessed through a mobile application called ‘AayakarSetu’ on Android phone. Customer support executive having expertise in tax-related matters through this platform helps users in resolving their queries on-line.

Moreover, it has dedicated team of experts from IT department and independent tax practitioners to answer general queries of a taxpayer. This first-time initiative is aimed to enhance taxpayer services in the country.

Tags:

12345...102030...60