June 16, 2023

Tax credit for alternate minimum tax (1) The credit for tax paid by a person under section 115JC shall be allowed to him in accordance with the provisions of this section. (2) The tax credit of an assessment year to be allowed under sub-section (1) shall be the excess of alternate minimum tax paid over the regular income-tax payable of that year: Provided that where the amount of tax credit in respect of any income-tax paid in any country or specified territory outside India under section 90 or section 90A or section 91, allowed against the alternate minimum tax payable, exceeds the amount of the tax credit admissible against the regular income-tax payable by the assessee, then, while computing the amount of credit under this sub-section, such excess amount shall be ignored. (3) No interest shall be payable on tax credit allowed under sub-section (1). (4) The amount of tax credit determined under sub-section (2) shall be carried forward and set off in accordance with the provisions of sub-sections (5) and (6) but such carry forward shall not be allowed beyond the fifteenth assessment year immediately succeeding the assessment year for which tax credit becomes allowable under sub-section (1). (5) In any assessment year in which the regular income-tax exceeds the alternate minimum tax, the tax credit shall be allowed to be set off to the extent of the excess of regular income-tax over the alternate minimum tax and the balance of the tax credit, if any, shall be carried forward. (6) If the amount of regular income-tax or the alternate minimum tax is reduced or increased as a result of any order passed under this Act, the amount of tax credit allowed under this section shall also be varied accordingly. (7) The provisions of this section shall not apply to a person who has exercised the option referred to in section 115BAC or section 115BAD. Following sub-section (7) shall be substituted for the existing sub-section (7) of section 115JD by the Finance Act, 2023, w.e.f. 1-4-2024: (7) The provisions of this section shall not apply to a person, where—  (i) such person has exercised the option referred to in sub-section (5) of section 115BAC or sub-section (5) of section 115BAD or sub-section (5) of section 115BAE; or  (ii) income-tax payable in respect of the total income of such person is computed under sub-section (1A) of section 115BAC. Analysys of Section 115JD The following points describe how tax credits are calculated and used under section 115JC: A person who pays taxes under section 115JC can claim a tax credit based on the provisions of this section. The tax credit to be allowed is calculated as the difference between the alternate minimum tax paid and the regular income tax payable for a particular assessment year. If any tax credit is claimed for income taxes paid in a foreign country or specified territory under section 90, section 90A, or section 91, and if this credit exceeds the amount of tax credit allowed against the regular income tax, the excess amount will be ignored when calculating the tax credit under this section. No interest is payable on the tax credit allowed under sub-section (1). The tax credit determined under sub-section (2) can be carried forward and set off in subsequent assessment years. However, the carry forward is limited to a maximum of fifteen assessment years following the year in which the tax credit becomes allowable. If the regular income tax or the alternate minimum tax amount is changed due to an order passed under the Income Tax Act, the tax credit allowed under this section will also be adjusted accordingly. The provisions of this section do not apply to individuals who have chosen the tax options mentioned in section 115BAC, section 115BAD, or section 115BAE. Additionally, it does not apply if the income tax payable is calculated under sub-section (1A) of section 115BAC. To summarize, this section allows individuals to claim a tax credit for the difference between the alternate minimum tax and the regular income tax. The credit can be carried forward for up to fifteen years and adjusted based on changes to the tax amounts. However, certain individuals who have chosen specific tax options or fall under specific income tax calculations are not eligible for this tax credit. Example 1: Let’s assume Mr. Sharma, an individual taxpayer, has paid a regular income tax of Rs. 5,00,000 in the assessment year 2023-2024. However, he also paid an alternate minimum tax of Rs. 3,50,000 in the same year. As per the provisions mentioned, Mr. Sharma is eligible for a tax credit. Therefore, the tax credit allowed to him would be the excess of alternate minimum tax paid over the regular income tax payable, which is Rs. 3,50,000 – Rs. 5,00,000 = -Rs. 1,50,000 (negative value indicates no tax credit is available against regular income tax payable). Example 2: Suppose Ms. Patel, a resident individual, has exercised the option mentioned in sub-section (5) of section 115BAD for the assessment year 2024-2025. In this case, the provisions of section 115JC do not apply to her. Therefore, any tax credit calculations under section 115JC would not be relevant to her tax liability for that assessment year. Example 3: Mr. Kumar, an Indian resident, has earned income from a specified territory outside India. He paid income tax of Rs. 2,00,000 in that specified territory, and he also paid an alternate minimum tax of Rs. 1,50,000 in the assessment year 2023-2024. As per the provisions, if the tax credit in respect of any income tax paid in a specified territory outside India exceeds the tax credit admissible against the regular income tax payable, the excess amount is ignored. In this case, if the tax credit against regular income tax payable is less than Rs. 2,00,000, the excess amount of Rs. 50,000 will be ignored while computing the tax credit under section 115JC. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration

Special provisions relating to certain companies (1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee being a company (other than a company engaged in the business of generation or distribution of electricity), the total income, as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 1988 but before the 1st day of April, 1991 (hereafter in this section referred to as the relevant previous year), is less than thirty per cent of its book profit, the total income of such assessee chargeable to tax for the relevant previous year shall be deemed to be an amount equal to thirty per cent of such book profit. (1A) Every assessee, being a company, shall, for the purposes of this section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956 (1 of 1956)83. Explanation.—For the purposes of this section, “book profit” means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (1A), as increased by—  (a) the amount of income-tax paid or payable, and the provision therefor; or  (b) the amounts carried to any reserves (other than the reserves specified in section 80HHD or sub-section (1) of section 33AC), by whatever name called; or  (c) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; or  (d) the amount by way of provision for losses of subsidiary companies; or  (e) the amount or amounts of dividends paid or proposed; or  (f) the amount or amounts of expenditure relatable to any income to which any of the provisions of Chapter III applies; or  (g) the amount withdrawn from the reserve account under section 80HHD, where it has been utilised for any purpose other than those referred to in sub-section (4) of that section; or  (h) the amount credited to the reserve account under section 80HHD, to the extent that amount has not been utilised within the period specified in sub-section (4) of that section; or*  (ha) the amount deemed to be the profits under sub-section (3) of section 33AC, if any amount referred to in clauses (a) to (f) is debited or, as the case may be, the amount referred to in clauses (g) and (h) is not credited to the profit and loss account, and as reduced by,—  (i) the amount withdrawn from reserves (other than the reserves specified in section 80HHD) or provisions, if any such amount is credited to the profit and loss account: Provided that, where this section is applicable to an assessee in any previous year (including the relevant previous year), the amount withdrawn from reserves created or provisions made in a previous year relevant to the assessment year commencing on or after the 1st day of April, 1988 shall not be reduced from the book profit unless the book profit of such year has been increased by those reserves or provisions (out of which the said amount was withdrawn) under this Explanation; or  (ii) the amount of income to which any of the provisions of Chapter III applies, if any such amount is credited to the profit and loss account; or (iii) the amounts as arrived at after increasing the net profit by the amounts referred to in clauses (a) to (f) and reducing the net profit by the amounts referred to in clauses (i) and (ii) attributable to the business, the profits from which are eligible for deduction under section 80HHC or section 80HHD; so, however, that such amounts are computed in the manner specified in sub-section (3) or sub-section (3A) of section 80HHC or sub-section (3) of section 80HHD, as the case may be; or (iv) the amount of the loss or the amount of depreciation which would be required to be set off against the profit of the relevant previous year as if the provisions of clause (b) of the first proviso to sub-section (1) of section 205 of the Companies Act, 1956 (1 of 1956)84, are applicable. (2) Nothing contained in sub-section (1) shall affect the determination of the amounts in relation to the relevant previous year to be carried forward to the subsequent year or years under the provisions of sub-section (2) of section 32 or sub-section (3) of section 32A or clause (ii) of sub-section (1) of section 72 or section 73 or section 74 or sub-section (3) of section 74A or sub-section (3) of section 80J. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice  Company Registration Services in major cities of India Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India Our Offices CA in Delhi | CA in Jaipur | CA in Gurgaon | CA Firm in India

Chapter not to apply if the assessee so chooses A non-resident Indian may elect not to be governed by the provisions of this Chapter for any assessment year by furnishing his return of income for that assessment year under section 139 declaring therein that the provisions of this Chapter shall not apply to him for that assessment year and if he does so, the provisions of this Chapter shall not apply to him for that assessment year and his total income for that assessment year shall be computed and tax on such total income shall be charged in accordance with the other provisions of this Act. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice  Company Registration Services in major cities of India Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India Our Offices CA in Delhi | CA in Jaipur | CA in Gurgaon | CA Firm in India

Benefit under Chapter to be available in certain cases even after the assessee becomes resident Where a person, who is a non-resident Indian in any previous year, becomes assessable as resident in India in respect of the total income of any subsequent year, he may furnish to the Assessing Officer a declaration in writing along with his return of income82 under section 139 for the assessment year for which he is so assessable, to the effect that the provisions of this Chapter shall continue to apply to him in relation to the investment income derived from any foreign exchange asset being an asset of the nature referred to in sub-clause (ii) or sub-clause (iii) or sub-clause (iv) or sub-clause (v) of clause (f) of section 115C; and if he does so, the provisions of this Chapter shall continue to apply to him in relation to such income for that assessment year and for every subsequent assessment year until the transfer or conversion (otherwise than by transfer) into money of such assets. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice  Company Registration Services in major cities of India Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India Our Offices CA in Delhi | CA in Jaipur | CA in Gurgaon | CA Firm in India

Return of income not to be filed in certain cases It shall not be necessary for a non-resident Indian to furnish under sub-section (1) of section 139 a return of his income if—  (a) his total income in respect of which he is assessable under this Act during the previous year consisted only of investment income or income by way of long-term capital gains or both; and  (b) the tax deductible at source under the provisions of Chapter XVII-B has been deducted from such income. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice  Company Registration Services in major cities of India Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India Our Offices CA in Delhi | CA in Jaipur | CA in Gurgaon | CA Firm in India

Deemed income relating to certain companies (1) Notwithstanding anything contained in any other provisions of this Act, where in the case of an assessee, being a company, the total income, as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 1997 but before the 1st day of April, 2001 (hereafter in this section referred to as the relevant previous year) is less than thirty per cent of its book profit, the total income of such assessee chargeable to tax for the relevant previous year shall be deemed to be an amount equal to thirty per cent of such book profit. (2) Every assessee, being a company, shall, for the purposes of this section prepare its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and III of Schedule VI85 to the Companies Act, 1956 (1 of 1956): Provided that while preparing profit and loss account, the depreciation shall be calculated on the same method and rates which have been adopted for calculating the depreciation for the purpose of preparing the profit and loss account laid before the company at its annual general meeting in accordance with the provisions of section 210 of the Companies Act, 1956 (1 of 1956)86 : Provided further that where a company has adopted or adopts the financial year under the Companies Act, 1956 (1 of 1956)87, which is different from the previous year under the Act, the method and rates for calculation of depreciation shall correspond to the method and rates which have been adopted for calculating the depreciation for such financial year or part of such financial year falling within the relevant previous year. Explanation.—For the purposes of this section, “book profit” means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (2), as increased by—  (a) the amount of income-tax paid or payable, and the provision therefor; or  (b) the amounts carried to any reserves by whatever name called; or  (c) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; or  (d) the amount by way of provision for losses of subsidiary companies; or  (e) the amount or amounts of dividends paid or proposed; or  (f) the amount or amounts of expenditure relatable to any income to which any of the provisions of Chapter III applies;  (g) the amount or amounts set aside as provision for diminution in the value of any asset, if any amount referred to in clauses (a) to (g) is debited to the profit and loss account, and as reduced by,—   (i) the amount withdrawn from any reserves or provisions if any such amount is credited to the profit and loss account: Provided that, where this section is applicable to an assessee in any previous year (including the relevant previous year), the amount withdrawn from reserves created or provisions made in a previous year relevant to the assessment year commencing on or after the 1st day of April, 1997 but ending before the 1st day of April, 2001 shall not be reduced from the book profit unless the book profit of such year has been increased by those reserves or provisions (out of which the said amount was withdrawn) under this Explanation; or  (ii) the amount of income to which any of the provisions of Chapter III applies, if any such amount is credited to the profit and loss account; or (iii) the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account. Explanation.—For the purposes of this clause,—   (a) the loss shall not include depreciation;   (b) the provisions of this clause shall not apply if the amount of loss brought forward or unabsorbed depreciation is nil; or (iv) the amount of profits derived by an industrial undertaking from the business of generation or generation and distribution of power; or  (v) the amount of profits derived by an industrial undertaking located in an industrially backward State or district as referred to in sub-section (4) and sub-section (5) of section 80-IB, for the assessment years such industrial undertaking is eligible to claim a deduction of hundred per cent of the profits and gains under sub-section (4) or sub-section (5) of section 80-IB; or (vi) the amount of profits derived by an industrial undertaking from the business of developing, maintaining and operating any infrastructure facility as defined in the Explanation to sub-section (4) of section 80-IA and subject to fulfilling the conditions laid down in that sub-section; or (vii) the amount of profits of sick industrial company for the assessment year commencing from the assessment year relevant to the previous year in which the said company has become a sick industrial company under sub-section (1) of section 17 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) and ending with the assessment year during which the entire net worth of such company becomes equal to or exceeds the accumulated losses. Explanation.—For the purposes of this clause, “net worth” shall have the meaning assigned to it in clause (ga) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986); or (viii) the amount of profits eligible for deduction under section 80HHC, computed under clause (a), (b) or (c) of sub-section (3) or sub-section (3A), as the case may be, of that section, and subject to the conditions specified in sub-sections (4) and (4A) of that section;* or (ix) the amount of profits eligible for deduction under section 80HHE, computed under sub-section (3) of that section. (3) Nothing contained in sub-section (1) shall affect the determination of the amounts in relation to the relevant previous year to be carried forward to the subsequent year or years under the provisions of sub-section (2) of section 32 or sub-section (3) of section 32A or clause (ii) of sub-section (1) of section 72 or section 73 or section 74 or sub-section (3) of section 74A. (4) Save as otherwise provided in this section, all

Capital gains on transfer of foreign exchange assets not to be charged in certain cases (1) Where, in the case of an assessee being a non-resident Indian, any long-term capital gains arise from the transfer of a foreign exchange asset (the asset so transferred being hereafter in this section referred to as the original asset), and the assessee has, within a period of six months after the date of such transfer, invested the whole or any part of the net consideration in any specified asset, or in any savings certificates referred to in clause (4B) of section 10 (such specified asset, or such savings certificates being hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,—  (a) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45;  (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of acquisition of the new asset bears to the net consideration shall not be charged under section 45. Explanation.—For the purposes of this sub-section,—   (i) “cost”, in relation to any new asset, being a deposit referred to in sub-clause (iii), or specified under sub-clause (v), of clause (f) of section 115C, means the amount of such deposit;  (ii) “net consideration”, in relation to the transfer of the original asset, means the full value of the consideration received or accruing as a result of the transfer of such asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. (2) Where the new asset is transferred or converted (otherwise than by transfer) into money, within a period of three years from the date of its acquisition, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a) or, as the case may be, clause (b), of sub-section (1) shall be deemed to be income chargeable under the head “Capital gains” relating to capital assets other than short-term capital assets of the previous year in which the new asset is transferred or converted (otherwise than by transfer) into money. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice  Company Registration Services in major cities of India Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India Our Offices CA in Delhi | CA in Jaipur | CA in Gurgaon | CA Firm in India

Tax credit in respect of tax paid on deemed income relating to certain companies Unlocking Tax Relief for Eligible Companies Within the intricate tapestry of the Indian Income Tax Act 1961, Section 115JAA holds the potential to alleviate tax burdens for certain companies. This section, often overlooked, offers a valuable tax credit mechanism, empowering eligible companies to offset tax liabilities and streamline their financial strategies. Understanding the Cornerstones of Section 115JAA Eligibility: Applies exclusively to companies. Extends to companies paying tax under either Section 115JA or Section 115JB. Tax Credit Mechanism: The credit arises when tax paid under Section 115JA or Section 115JB surpasses the tax payable based on the company’s total income computed under other provisions of the Act. The credit amount is calculated as the difference between these two tax amounts. Carry Forward and Set-Off: The tax credit can be carried forward for a period of five assessment years (for credit under Section 115JA) or fifteen assessment years (for credit under Section 115JB). Set-off is permitted in a year when tax liability arises on the company’s total income, computed in accordance with Act provisions other than Section 115JA or Section 115JB. Set-off is limited to the difference between the tax on the company’s total income and the tax that would have been payable under Section 115JA or Section 115JB for that assessment year. Key Exclusions: The section’s provisions do not apply to limited liability partnerships converted from private or unlisted public companies under the Limited Liability Partnership Act, 2008. Companies exercising the option under Section 115BAA are also excluded. Illuminating Examples within the Indian Context: Scenario 1: ABC Corporation, a manufacturing company, pays tax of Rs. 10 lakhs under Section 115JB in a particular assessment year. However, its tax liability based on total income computed under other provisions amounts to Rs. 8 lakhs. ABC Corporation can claim a tax credit of Rs. 2 lakhs (10 lakhs – 8 lakhs), which can be carried forward and set off in subsequent assessment years. Scenario 2: PQR Limited, a software development company, operates under Section 115JA. In an assessment year, it pays tax of Rs. 15 lakhs under this section, whereas its tax liability calculated under other provisions stands at Rs. 12 lakhs. PQR Limited can avail a tax credit of Rs. 3 lakhs, eligible for carry forward and set-off in future assessment years, as per the provisions of Section 115JAA. Harnessing Section 115JAA for Strategic Tax Planning: By understanding and effectively utilizing Section 115JAA, companies can optimize their tax management strategies, potentially leading to significant financial benefits. Collaborating with tax professionals is crucial to navigate the complexities of this section and ensure compliance with applicable regulations.   Provision Explanation     Eligibility Companies paying tax under Section 115JA or Section 115JB Tax Credit Difference between tax paid under Section 115JA/115JB and tax payable on total income Carry Forward 5 years for Section 115JA credit, 15 years for Section 115JB credit Set-Off Allowed in years with tax liability on total income (excluding Section 115JA/115JB) Set-Off Limit Difference between total income tax and tax payable under Section 115JA/115JB for that year Exclusions Limited liability partnerships converted from private/unlisted public companies, companies opting for Section 115BAA Provision of Section 115JAA of Income Tax Act 1961 (1) Where any amount of tax is paid under sub-section (1) of section 115JA by an assessee being a company for any assessment year, then, credit in respect of tax so paid shall be allowed to him in accordance with the provisions of this section. (1A) Where any amount of tax is paid under sub-section (1) of section 115JB by an assessee, being a company for the assessment year commencing on the 1st day of April, 2006 and any subsequent assessment year, then, credit in respect of tax so paid shall be allowed to him in accordance with the provisions of this section. (2) The tax credit to be allowed under sub-section (1) shall be the difference of the tax paid for any assessment year under sub-section (1) of section 115JA and the amount of tax payable by the assessee on his total income computed in accordance with the other provisions of this Act: Provided that no interest shall be payable on the tax credit allowed under sub-section (1). (2A) The tax credit to be allowed under sub-section (1A) shall be the difference of the tax paid for any assessment year under sub-section (1) of section 115JB and the amount of tax payable by the assessee on his total income computed in accordance with the other provisions of this Act: Provided that no interest shall be payable on the tax credit allowed under sub-section (1A): Provided further that where the amount of tax credit in respect of any income-tax paid in any country or specified territory outside India, under section 90 or section 90A or section 91, allowed against the tax payable under the provisions of sub-section (1) of section 115JB exceeds the amount of such tax credit admissible against the tax payable by the assessee on its income in accordance with the other provisions of this Act, then, while computing the amount of credit under this sub-section, such excess amount shall be ignored. (3) The amount of tax credit determined under sub-section (2) shall be carried forward and set off in accordance with the provisions of sub-sections (4) and (5) but such carry forward shall not be allowed beyond the fifth assessment year immediately succeeding the assessment year in which tax credit becomes allowable under sub-section (1). (3A) The amount of tax credit determined under sub-section (2A) shall be carried forward and set off in accordance with the provisions of sub-sections (4) and (5) but such carry forward shall not be allowed beyond the fifteenth assessment year immediately succeeding the assessment year in which tax credit becomes allowable under sub-section (1A). (4) The tax credit shall be allowed set off in a year when tax becomes payable on the total income computed in accordance with the provisions of this Act other than section 115JA or section 115JB, as the case may be. (5) Set off in respect of brought

Special provision for payment of tax by certain companies (1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee, being a company, the income-tax, payable on the total income as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 2012, is less than eighteen and one-half per cent of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income-tax at the rate of eighteen and one-half per cent: Provided that for the previous year relevant to the assessment year commencing on or after the 1st day of April, 2020, the provisions of this sub-section shall have effect as if for the words “eighteen and one-half per cent” occurring at both the places, the words “fifteen per cent” had been substituted. (2) Every assessee,—  (a) being a company, other than a company referred to in clause (b), shall, for the purposes of this section, prepare its statement of profit and loss for the relevant previous year in accordance with the provisions of Schedule III to the Companies Act, 2013 (18 of 2013); or  (b) being a company, to which the second proviso to sub-section (1) of section 129 of the Companies Act, 2013 (18 of 2013) is applicable, shall, for the purposes of this section, prepare its statement of profit and loss for the relevant previous year in accordance with the provisions of the Act governing such company: Provided that while preparing the annual accounts including statement of profit and loss,—   (i) the accounting policies;  (ii) the accounting standards adopted for preparing such accounts including statement of profit and loss; (iii) the 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 in accordance with the provisions of section 129 of the Companies Act, 2013 (18 of 2013): Provided further that where the company has adopted or adopts the financial year under the Companies Act, 2013 (18 of 2013), which is different from the previous year under this Act,—   (i) the accounting policies;  (ii) the accounting standards adopted for preparing such accounts including statement of profit and loss; (iii) the method and rates adopted for calculating the depreciation, shall 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 previous year. Explanation 1.—For the purposes of this section, “book profit” means the profit as shown in the statement of profit and loss for the relevant previous year prepared under sub-section (2), as increased by—  (a) the amount of income-tax paid or payable, and the provision therefor; or  (b) the amounts carried to any reserves, by whatever name called, other than a reserve specified under section 33AC; or  (c) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; or  (d) the amount by way of provision for losses of subsidiary companies; or  (e) the amount or amounts of dividends paid or proposed; or  (f) the amount or amounts of expenditure relatable to any income to which section 10 (other than the provisions contained in clause (38) thereof) or section 11 or section 12 apply; or (fa) the amount or amounts of expenditure relatable to income, being share of the assessee in the income of an association of persons or body of individuals, on which no income-tax is payable in accordance with the provisions of section 86; or (fb) the amount or amounts of expenditure relatable to income accruing or arising to an assessee, being a foreign company, from,—   (A) the capital gains arising on transactions in securities; or   (B) the interest, 88[dividend,] royalty or fees for technical services chargeable to tax at the rate or rates specified in Chapter XII, if the income-tax payable thereon in accordance with the provisions of this Act, other than the provisions of this Chapter, is at a rate less than the rate specified in sub-section (1); or (fc) the amount representing notional loss on transfer of a capital asset, being share of a special purpose vehicle, to a business trust in exchange of units allotted by the trust referred to in clause (xvii) of section 47 or the amount representing notional loss resulting from any change in carrying amount of said units or the amount of loss on transfer of units referred to in clause (xvii) of section 47; or (fd) the amount or amounts of expenditure relatable to income by way of royalty in respect of patent chargeable to tax under section 115BBF; or  (g) the amount of depreciation,  (h) the amount of deferred tax and the provision therefor,  (i) the amount or amounts set aside as provision for diminution in the value of any asset,  (j) the amount standing in revaluation reserve relating to revalued asset on the retirement or disposal of such asset,  (k) the amount of gain on transfer of units referred to in clause (xvii) of section 47 computed by taking into account the cost of the shares exchanged with units referred to in the said clause or the carrying amount of the shares at the time of exchange where such shares are carried at a value other than the cost through statement of profit and loss, as the case may be; if any amount referred to in clauses (a) to (i) is debited to the statement of profit and loss or if any amount referred to in clause (j) is not credited to the statement of profit and loss, and as reduced by,—  (i) the amount withdrawn from any reserve or provision (excluding a reserve created before

Special provisions for payment of tax by certain persons other than a company (1) Notwithstanding anything contained in this Act, where the regular income-tax payable for a previous year by a person, other than a company, is less than the alternate minimum tax payable for such previous year, the adjusted total income shall be deemed to be the total income of that person for such previous year and he shall be liable to pay income-tax on such total income at the rate of eighteen and one-half per cent. (2) Adjusted total income referred to in sub-section (1) shall be the total income before giving effect to this Chapter as increased by—   (i) deductions claimed, if any, under any section (other than section 80P) included in Chapter VI-A under the heading “C.—Deductions in respect of certain incomes“;  (ii) deduction claimed, if any, under section 10AA; and (iii) deduction claimed, if any, under section 35AD as reduced by the amount of depreciation allowable in accordance with the provisions of section 32 as if no deduction under section 35AD was allowed in respect of the assets on which the deduction under that section is claimed. (3) Every person to whom this section applies shall obtain a report, before the specified date referred to in section 44AB, in such form as may be prescribed93, from an accountant referred to in the Explanation below sub-section (2) of section 288, certifying that the adjusted total income and the alternate minimum tax have been computed in accordance with the provisions of this Chapter and furnish such report by that date. 94[(4) Notwithstanding anything contained in sub-section (1), where the person referred to therein, is a—  (i) unit located in an International Financial Services Centre and derives its income solely in convertible foreign exchange, the provisions of sub-section (1) shall have effect as if for the words “eighteen and one-half per cent”, the words “nine per cent” had been substituted;  (ii) co-operative society, the provisions of sub-section (1) shall have effect as if for the words “eighteen and one-half per cent”, the words “fifteen per cent” had been substituted.] (5) The provisions of this section shall not apply to a person who has exercised the option referred to in section 115BAC or section 115BAD. Following sub-section (5) shall be substituted for the existing sub-section (5) of section 115JC by the Finance Act, 2023, w.e.f. 1-4-2024: (5) The provisions of this section shall not apply to a person, where—   (i) such person has exercised the option referred to in sub-section (5) of section 115BAC or sub-section (5) of section 115BAD or sub-section (5) of section 115BAE; or  (ii) income-tax payable in respect of the total income of such person is computed under sub-section (1A) of section 115BAC. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice  Company Registration Services in major cities of India Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India Our Offices CA in Delhi | CA in Jaipur | CA in Gurgaon | CA Firm in India