Minimum tax on companies: tax is deemed on book profit when computed tax falls below the prescribed threshold. A statutory minimum tax requires that if a company's tax computed under the Income-tax Act for relevant years is less than a prescribed proportion of its book profit, tax payable is deemed to equal that proportion of book profit. Companies must prepare profit and loss accounts per Schedule VI and follow the same accounting policies, standards and depreciation methods used in annual accounts. The statute prescribes specific add-backs and allowable reductions in computing book profit, preserves certain carry-forward and set-off provisions, and mandates an accountant's certificate with the income-tax return.
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Provisions expressly mentioned in the judgment/order text.
Minimum tax on companies: tax is deemed on book profit when computed tax falls below the prescribed threshold.
A statutory minimum tax requires that if a company's tax computed under the Income-tax Act for relevant years is less than a prescribed proportion of its book profit, tax payable is deemed to equal that proportion of book profit. Companies must prepare profit and loss accounts per Schedule VI and follow the same accounting policies, standards and depreciation methods used in annual accounts. The statute prescribes specific add-backs and allowable reductions in computing book profit, preserves certain carry-forward and set-off provisions, and mandates an accountant's certificate with the income-tax return.
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