Understanding Book Profits for MAT: Key Adjustments Under Section 115JB(2A) of the Income Tax Act
For companies preparing financial statements under Indian Accounting Standards, Section 115JB(2A) of the Income Tax Act outlines the computation of book profits for Minimum Alternate Tax (MAT) purposes. Book profits are adjusted by increasing amounts credited and decreasing amounts debited to other comprehensive income under "Items that will not be re-classified to profit or loss," except for revaluation surpluses and certain investment gains or losses. Adjustments also apply when assets or investments are retired or transferred. Additionally, book profits are adjusted for non-cash asset distributions during demergers as per Indian Accounting Standards 10.
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