January 2019

BOOK PROFIT – WHETHER ADJUSTMENT REQUIRED FOR SHARE OF LOSS FROM PARTNERSHIP FIRM?

Pradip Kapasi / Gautam Nayak / Bhadresh Doshi
Chartered Accountants

 Issue for consideration


U/s. 115JB of the Income Tax Act, 1961, a company is required to computateits book profits and pay the Minimum Alternate Tax at 18.5% of such book profits. Explanation 1 to section 115JB provides that the term “book profit” means the ‘profit’ as shown in the statement of profit and loss for the relevant previous year prepared under s/s. (2), as increased or reduced by certain items specified therein. One of the items of reduction contained in clause (ii) is -

 

(ii) – the amount of income to which any of the provisions of section 10 (other than the provisions contained in clause (38) thereof) or section 11 or section 12 apply, if any such amount is credited to the statement of profit and loss.

 

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