REGULATORY UPDATE: MINISTRY OF FINANCE -RELAXATION IN MAT PROVISIONS FOR COMPANIES FACING INSOLVENCY.

The Ministry of Finance vide its press release dated 6 January 2018 has informed that representations were received from the companies against whom an application for corporate insolvency resolution has been admitted by the adjudicating authority under section 7, 9 and 10 and are facing hardship due to restriction in allowance of brought forward loss for computation of book profit under section 115JB of the Income Tax Act 1961. In view of the above, proposed relaxations in the provisions relating to levy Minimum Alternate Tax (MAT) in case of the companies against whom an application for corporate Insolvency Resolution Process has been admitted under the insolvency and Bankruptcy Code 2016. With effect from the assessment year 2018-19 and financial Year 2017-18. It is proposed that in case of a company, against whom an application for corporate insolvency resolution process has been admitted by the adjudicating authority, 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. Source: http://pib.nic.in/newsite/PrintRelease.aspx?relid=175447

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