The existing provisions of
section 115JB of the Income-tax Act, 1961 (‘the Act’), inter alia, provide, that, for the purposes of levy of Minimum
Alternate Tax (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 Adjudicating Authority 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 Adjudicating Authority 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.
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