MAT on long term Capital Gain

[Common Issues]

Is Minimum alternate tax (MAT) applicable on shares (long term assets) on which STT was already paid.

[subhash barnwal]

As per Sect.115JB,In calculation of net profit for MAT purpose amount to be duducted which income are exempt from tax,income under sect.10,11,12 will be deducted from total income but not covered sect.10(38).Therefore MAT will be applicable on shares (long term assets)on which STT was already paid.

AI Summary

Minimum Alternate Tax applicability on long term capital gains: MAT applies even when securities transaction tax was paid.
MAT applies to long term capital gains on shares despite STT being paid because the MAT net profit computation allows deductions only for certain exempt incomes and does not include the exemption that covers long term equity gains; therefore such gains are included in book profit for MAT purposes.