Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 6th January, 2018

PRESS RELEASE

The existing provisions of section 115JB of the Income-tax Act, 1961 (‘the Act’), inter alia, provide, that, for the purposes of levy of Minimum Alternate Tax (MAT) in case of a company, the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account shall be reduced from the book profit.

In this regard, representations have been received from various stakeholders that the companies against whom an application for corporate insolvency resolution process has been admitted by the Adjudicating Authority under section 7 or section 9 or section 10 of the Insolvency and Bankruptcy Code, 2016 (‘the IBC’), are facing hardship due to restriction in allowance of brought forward loss for computation of book profit under section 115JB of the Act.

With a view to minimize the genuine hardship faced by such companies, it has been decided, that, with effect from Assessment Year 2018-19 (i.e. Financial Year 2017-18), in case of a company, against whom an application for corporate insolvency resolution process has been admitted by the Adjudicating Authority under section 7 or section 9 or section 10 of the IBC, the amount of total loss brought forward (including unabsorbed depreciation) shall be allowed to be reduced from the book profit for the purposes of levy of MAT under section 115JB of the Act.

Appropriate legislative amendment in this regard will be made in due course.

(Surabhi Ahluwalia)

Commissioner of Income Tax (Media & Technical Policy)

Official Spokesperson, CBDT

Minimum Alternate Tax relief for insolvent companies allows full reduction of brought forward losses from book profit for MAT. Relaxation to the computation of Minimum Alternate Tax under section 115JB permits companies whose corporate insolvency resolution applications have been admitted under the IBC to reduce the entire amount of total loss brought forward, including unabsorbed depreciation, from book profit for MAT purposes, effective from Assessment Year 2018-19; an appropriate legislative amendment will be made in due course.