IT Dept relaxes norms for MAT on Companies facing insolvency

New Delhi Jan 7: The Income Tax Department on Saturday has relaxed norms for levy of Minimum Alternate Tax (MAT) on companies facing corporate insolvency proceedings.

Currently as per Income Tax Act MAT is levied on book profit after deducting the amount of loss brought forward or unabsorbed depreciation, whichever is less.

The IT department in an order has said that "With effect from assessment year 2018-19 (FY2017-18), in case of a company, against whom an application for corporate insolvency resolution process has been admitted by the adjudicating authority under...the IBC, 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".

Officials added that "This has been done to minimise the genuine hardships faced by such companies".