[India], Jan 6 (ANI): In a bid to minimise the hardship faced by companies against whom an application for corporate insolvency resolution process has been admitted under the Insolvency and Bankruptcy Code, 2016, the Centre on Saturday announced a relaxation in the provisions relating to levy of Minimum Alternate Tax (MAT).
With effect from Financial Year 2017-18, the Central Board of Direct Taxes (CBDT) stated that 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 Income-tax Act, 1961.
The existing provisions of the aforementioned section provide that for the purposes of levy of 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 under IBC 2016 are facing hardship due to restriction in allowance of brought forward loss for computation of book profit under section 115JB of the Act.
Taking cognisance of this, the CBDT in an official statement noted that the relaxation will be sanctioned from FY 2017-18, adding that appropriate legislative amendment in this regard will be made in due course. (ANI)