Mat on Long Term Capital Gain in Companies A/cs

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Dear Sir,

In FY 2011-12 the companies Profit & Loss accounts Books Profit shows the Rs. 22,25,475/-as on 31st March-2012.
Profit & Loss accounts includes the Long Term Capital Gain on Share for RS.14,35,345/- & Dividend Rs.34710/-.

While preparing computation of income of the company the  normal Tax Due is Rs.2,65,241/- and the MAT due is RS.4,24,064/-. Long Term Capital Gain for  Rs.14,35,345/- & Dividend Rs.34,710/- is exempt U.S. 10(38).  

MAT due is correct or not. What can i do. What is the actual accounts treatment

Kindly give the suggestion as earliest.

Thanks & Regards


(N. Kadam)

AI Summary

Inquiring About Correct MAT Calculation: Dividends Under Section 115O Deductible from Book Profits Under Section 115JB A user inquired about the correct treatment of long-term capital gains and dividends in the calculation of Minimum Alternate Tax (MAT) for a company's financial year 2011-12. The company's profit included exempt long-term capital gains and dividends. The MAT due was higher than the normal tax due. A respondent clarified that dividends declared under section 115O are deductible from book profits under section 115JB, and MAT should be calculated at 18.54%. The user sought advice on whether the MAT calculation was correct and how to properly account for these items.