Income Tax Act

Official PDF pages 276–280

SOURCE PDF PAGE 276
( ii )   the distribution referred to in columns A and B of serial number 2 of the
said Table shall be the distribution of non-cash assets to shareholders in
a demerger as per Appendix A of the Indian Accounting Standards 10;
( iii )   the amount referred to in columns A and B of serial number 4 of the said
Table shall be the amount which is relatable to the asset or investment
referred to in clause ( t )( vi )( B ) to ( E ) for the tax year in which such asset
or investment is retired, disposed, realised or otherwise transferred;
( iv )   the amount referred to in columns A and B of serial number 5 of the
said Table shall be the transition amount which is relatable to the foreign
operations referred to in clause ( t )( vi )( F ) for the tax year in which such
foreign operation is disposed or otherwise transferred.
( f ) For the purposes of book profit under clause ( c ), every company shall prepare
its statement of profit and loss for the relevant tax year in the following manner:—
( i )   in case of an insurance or banking company, or a company engaged in
the generation or supply of electricity, or any other class of company
for which a form of financial statement has been specified under the
enactment governing such class of company, as per the provisions of
such enactment;
( ii )   in all other cases, as per the provisions of Schedule III to the Companies
Act, 2013 (18 of 2013).
( g ) While preparing the annual accounts including statement of profit and loss by
the company, the—
( i )   accounting policies;
( ii )   accounting standards adopted for preparing such accounts including
statement of profit and loss; and
( iii )   method and rates adopted for calculating the depreciation,
shall be the same as have been adopted for the purpose of preparing such accounts
including statement of profit and loss and laid before the company at its annual
general meeting as per the provisions of section 129 of the Companies Act, 2013
(18 of 2013), or correspond to the accounting policies, accounting standards and
the method and rates for calculating the depreciation which have been adopted for
preparing such accounts including statement of profit and loss for, such financial
year or part of such financial year falling within the relevant tax year, where the
company has adopted or adopts the financial year which is different from the tax
year under this Act.
( h ) In the case of a resulting company, where the property and the liabilities of the
undertaking or undertakings being received by it are recorded at values different from
the values appearing in the books of account of the demerged company immediately
before the demerger, any change in such value shall be ignored for the purpose of
computation of book profit of the resulting company under this sub-section.
( i ) In the case of an assessee being a company, where—
( i )   there is an increase in book profit of the tax year due to income of past
year or years included in the book profit on account of—

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( A )   an advance pricing agreement entered into by the assessee under
section 168;or
( B )   a secondary adjustment required to be made under section 170
68
;
and
29
[ ( ii )   the assessee has not utilised the credit of tax paid under section 115JAA of
the Income-tax Act, 1961 (43 of 1961), in any subsequent tax year ending
on or before the 31st March, 2026, ]
the Assessing Officer shall, on an application made to him in this behalf by the
assessee,—
( I )   recompute the book profit of the past year or years and tax payable
under this sub-section, if any, by the assessee during the tax year in such
manner, as may be prescribed; and
( II )   the provisions of section 287   shall, so far as may be, apply and the period
of four years specified in sub-sections (7) and (8) of that section shall be
reckoned from the end of the tax year in which the said application is
received by the Assessing Officer.
( j ) Irrespective of anything contained in any other provisions of this Act, no interest
shall be payable to an assessee on the refund arising on account of clause ( i ).
( k ) Nothing contained in clause ( a ) shall affect the determination of the amounts,
in relation to the relevant tax year, to be carried forward to the subsequent year or
years under the provisions of section 33(11) or 111 or 112(1) or 113 or 115.
( l ) The provisions of this sub-section shall not be applicable to any assessee, being
a foreign company, where—
( i )   the assessee is a resident of a country or a specified territory with which
India has an agreement referred to in section 159(1) or the Central
Government has adopted any agreement under section 159(2) and the
assessee does not have a permanent establishment in India as per the
provisions of such agreement; or
( ii )   the assessee is a resident of a country with which India does not have
an agreement of the nature referred to in sub-clause ( i ) and the assessee
is not required to seek registration under any law for the time being in
force relating to companies; or
( iii )   the total income of the assessee comprises solely of profits and gains
from business referred to in section 61(2)  
30
[ *** ] , and such income has
been offered to tax at the rates specified in the respective sections.
29.   Substituted by the Finance Act, 2026, w.e.f.   1-4-2026 . Prior to its substitution, sub-clause
( ii ) read as under :
“( ii )   the assessee has not utilised the credit of tax paid under this sub-section in any
subsequent tax year under clauses ( m ), ( n ), ( o ) and ( p ),”
30.   Words “(Table: Sl. Nos. 1, 3, 4 and 5)” omitted by the Finance Act, 2026, w.e.f.   1-4-2026 .

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( m )  
31
[ *** ]
( n )  
31
[ *** ]
( o )  
31
[ *** ]
( p )  
31
[ *** ]
( q ) The provisions of this  
32
[ sub-section ]   shall not apply to a person,—
( i )   being a company having income accruing or arising from life insurance
business referred to in section 194(1) (Table: Sl. No. 6); or
( ii )   who has exercised the option under section 200(5) or section 201(2).
( r )  
33
[ *** ]
( s ) Every company to  
34
[ which this sub-section ]   applies, shall furnish a report in the
prescribed form from an accountant, certifying that the book profit in its case has
been computed as per the provisions of this section—
( i )   before the specified date referred to in section 63; or
( ii )   along with the return of income furnished in response to a notice under
section 268(1).
31.   Clauses ( m ), ( n ), ( o ) and ( p ) omitted by the Finance Act, 2026, w.e.f.   1-4-2026 . Prior to their
omission, clauses ( m ), ( n ), ( o ) and ( p ) read as under :
“( m ) Where any tax is paid under clause ( a ) by an assessee, then, credit shall be allowed to
him of an amount in excess of such minimum alternate tax over the tax payable by such
assessee on his total income computed as per the other provisions of this Act for that tax
year.
( n ) While allowing credit under clause ( m ),—
( i )   no interest shall be payable on the tax credit so allowed; and
( ii )   where tax credit in respect of any income-tax paid in any country or specified territory
outside India, under section 159(1) or (2), allowed against the minimum alternate
tax exceeds such tax credit admissible against the tax payable by the assessee on
its income as per the other provisions of this Act, then, while computing the credit
under clause ( m ), such excess amount shall be ignored.
( o ) ( i ) The tax credit determined under clause ( m ) shall be carried forward, and—
( A )   set off in a year, when tax payable on the total income computed as per the
provisions of this Act exceeds the minimum alternate tax; and
( B )   such set off in respect of brought forward tax credit shall be allowed for any
tax year to the extent of the difference between the tax on his total income and
the minimum alternate tax for that tax year;
( ii )   such carry forward of tax credit shall not be allowed beyond the fifteenth tax year
immediately succeeding the tax year in which the tax credit becomes allowable under
clause ( m );
( p ) Where as a result of any order passed under this Act, tax payable under this Act is
decreased or increased, as the case may be, tax credit allowed under clause ( m ) shall also be
decreased or increased accordingly.”
32.   Substituted for “section” by the Finance Act, 2026, w.e.f.   1-4-2026 .
33.   Omitted by the Finance Act, 2026, w.e.f.   1-4-2026 . Prior to its omission, clause ( r ) read as
under :
“( r ) In case of conversion of a private company or unlisted public company into a limited
liability partnership under the Limited Liability Partnership Act, 2008 (6 of 2009), the pro -
visions of clauses ( m ) to ( p ) shall not apply to the successor limited liability partnership.”
34.   Substituted for “which this section” by the Finance Act, 2026, w.e.f.   1-4-2026 .

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( t ) For the purposes of this sub-section,—
( i )   “Adjudicating Authority” shall have the same meaning as assigned to it in
section 5(1) of the Insolvency and Bankruptcy Code, 2016 (31 of 2016);
( ii )   “convergence date” means the first day of the first Indian Account -
ing Standards reporting period as defined in the Indian Accounting
Standards 101;
( iii )   “net worth” shall have the meaning assigned to it in section 3(1)( ga ) of the
Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986), as
it stood immediately before its repeal by the Sick Industrial Companies
(Special Provisions) Repeal Act, 2003 (1 of 2004);
( iv )   “private company” and “unlisted public company” shall have the mean -
ings respectively assigned to them in the Limited Liability Partnership
Act, 2008 (6 of 2009);
( v )   “securities” shall have the same meaning as assigned to it in section 2( h )
of the Securities Contracts (Regulation) Act, 1956 (42 of 1956)
87
;
( vi )   “transition amount” means the amount or the aggregate of the amounts
adjusted in the other equity (excluding capital reserve and securities
premium reserve) on the convergence date, but not including the
following:—
( A )   amount or aggregate of the amounts adjusted in the other compre -
hensive income on the convergence date which shall be subsequently
re-classified to the profit or loss;
( B )   revaluation surplus for assets as per the Indian Accounting Standards
16 and Indian Accounting Standards 38 adjusted on the convergence
date;
( C )   gains or losses from investments in equity instruments designated
at fair value through other comprehensive income as per the Indian
Accounting Standards 109 adjusted on the convergence date;
( D )   adjustments relating to items of property, plant and equipment
and intangible assets recorded at fair value as deemed cost as per
paragraphs D5 and D7 of the Indian Accounting Standards 101 on
the convergence date;
( E )   adjustments relating to investments in subsidiaries, joint ven -
tures and associates recorded at fair value as deemed cost as per
paragraph D15 of the Indian Accounting Standards 101 on the
convergence date; and
( F )   adjustments relating to cumulative translation differences of a
foreign operation as per paragraph D13 of the Indian Accounting
Standards 101 on the convergence date;
( vii )   “Tribunal” shall have the same meaning as assigned to it in section 2( 90 )
of the Companies Act, 2013 (18 of 2013);
( viii )   “Unit” means a unit established in an International Financial Services
Centre;

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( ix )   “year of convergence” means the tax year within which the convergence
date falls; and
( x )   a company shall be a subsidiary of another company, if such other
company holds more than half in the nominal value of equity share
capital of the company.
(2) ( a ) Irrespective of anything contained in this Act, where the regular income-tax
payable for a tax year by a person, other than a company, is less than the alternate
minimum tax payable for such tax year, then,—
( i )   the adjusted total income shall be deemed to be the total income of that
person for such tax year; and
( ii )   he shall be liable to pay income-tax equal to the alternate minimum tax.
( b ) For the purposes of this sub-section,—
( i )   “adjusted total income” shall be the total income before giving effect to
clause ( a ), as increased by deductions claimed, if any, under—
( I )   any section (other than section 149) included in Chapter VIII-C;
( II )   section 46 as reduced by depreciation allowable as per the provi -
sions of section 33, as if no deduction was allowed in respect of the
assets on which the deduction under that section is claimed;
( ii )   “alternate minimum tax” means the amount of tax computed on adjusted
total income,—
( I )   in case of an assessee being a unit located in an International
Financial Services Centre and deriving its income solely in convert -
ible foreign exchange, at the rate of 9%;
( II )   in case of an assessee being a co-operative society, at the rate of
15%;
( III )   in any other case, at a rate of 18.5%;
( iii )   “regular income-tax” means the income-tax payable for a tax year by a
person on his total income in accordance with the provisions of this Act
other than the provisions of this sub-section;
( iv )   “Unit” means a unit established in an International Financial Services
Centre.
( c ) The provisions of this sub-section shall apply to a person who has claimed any
deduction under any section (other than section 149
92
) included in Chapter VIII-C
or section 46.
( d ) The provisions of this sub-section shall not apply to—
( i )   a person, who has exercised the option under section 203(5) or section
204(2);
( ii )   a person, whose income-tax payable in respect of the total income of
such person is computed under section 202(1);
( iii )   an individual or a Hindu undivided family or an association of persons
or a body of individuals, whether incorporated or not, or an artificial