, ET Bureau|
Updated: Jan 06, 2018, 06.20 PM IST
NEW DELHI: Keen to minimise hardship faced by companies going in for insolvency resolution, the government will from financial year 2017-18 allow a company to reduce amount of total loss brought forward including unabsorbed depreciation from the book profit for the purposes of levy of minimum alternate tax.
This facility would be available only for companies against whom an application for corporate insolvency resolution process has been admitted by the adjudicating authority.
Appropriate legislative amendment in this regard will be made in due course, a Central Board of Direct Taxes statement said on Saturday.
An amendment to this effect is to be made in the section 115 JB of the Income Tax Act in the upcoming budget. ET had reported on the likely move on December 21.
The existing provisions of the section provide that for the purposes of levy of MAT 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.
The CBDT said it had received representations in this regard from various stakeholders that the companies against whom an application for corporate insolvency resolution process has been admitted by the Adjudicating Authority are facing hardship due to restriction in allowance of brought forward loss for computation of book profit The Indian Banks Association had sought removal of MAT for new investors apprehending depressed bids.
"...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 ...," it said.
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