Insolvent companies relax as rules for levying MAT made easy

With a view to minimise the genuine hardship faced by companies against whom an application for corporate insolvency resolution process has been admitted, the income tax department has eased the rules for levy of minimum alternate tax (MAT) to make the Insolvency and Bankruptcy Code, 2016 more effective. With effect from Financial Year 2017-18, the companies will be allowed to reduce the entire amount of loss brought forward including absorbed depreciation from the book profit for calculation of MAT under section 115JB of the Income-tax Act, 1961. The CBDT in an official statement noted that appropriate legislative amendment in this regard will be made in due course. The existing provisions states the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account shall be reduced from the book profit.