Mat on Long Term Capital Gain in Companies A/cs, Income Tax

[NATHURAM KADAM]

Dear Sir,

In FY 2011-12 the companies Profit & Loss accounts Books Profit shows the Rs. 22,25,475/-as on 31st March-2012.
Profit & Loss accounts includes the Long Term Capital Gain on Share for RS.14,35,345/- & Dividend Rs.34710/-.

While preparing computation of income of the company the  normal Tax Due is Rs.2,65,241/- and the MAT due is RS.4,24,064/-. Long Term Capital Gain for  Rs.14,35,345/- & Dividend Rs.34,710/- is exempt U.S. 10(38).  

MAT due is correct or not. What can i do. What is the actual accounts treatment

Kindly give the suggestion as earliest.

Thanks & Regards


(N. Kadam)

Posts / Replies

[CA GOPALJI AGRAWAL]

The basic rate of income tax is 30%. Surcharge is applicable if income exceeds 1 crore @5%. EC+SHEC extra. Please check the calculation for normal tax.

Dividend is covered u/s 10(34) if declared u/s 115O. Hence would be deducted while calculating book profit u/s 115JB hence it would be 2225475-34710. MAT would be 18.54% only.