The move to relax norms for levy of Minimum Alternate Tax (MAT) on companies facing corporate insolvency proceedings, as announced in the Budget, is likely to kindle investors interest in acquiring controlling stake in such companies.
According to Section 115JB of the Income Tax Act, MAT is levied on book profit after deducting the amount of loss brought forward or unabsorbed depreciation, whichever is less.
The Finance Bill 2018 has clarified that in computing MAT in case of a company whose application for corporate insolvency resolution under the Insolvency and Bankruptcy Code 2016 has been admitted by the Adjudicating Authority, an aggregate amount of unabsorbed depreciation and loss brought forward (excluding unabsorbed depreciation)…
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