Mat On Capital Receipt

12 65 75 000 representing forfeiture of share warrants is only a capital receipt by its nature not chargeable to tax.

Mat on capital receipt.

Can these items be subject to mat u s 115jb. All receipts and all outlays have to be routed through the p l account as per schedule iii to the companies act 2013. The issue of whether a particular receipt is capital or income derived from business is frequently presented to the courts and depends on the particular facts and circumstances of each case. The distinction between revenue and capital under the income tax law is fundamental.

Hi friends this video will help you to understand in an easy way the some concept of capital revenue expenditure receipts i have explain basic mcqs on c. Whether forfeiture of share warrants being a capital receipt would be liable for taxation u s 115jb. Capital receipts refer to incoming cash flows receipts originating from one of the following three sources. This implies that capital receipts are not taxable unless specifically covered under the definition of income.

Can capital receipts be subject to mat u s 115jb. Cash from the sale of shares in the business. It is undisputed fact that the receipt of capital gain has been included in the profit and loss account prepared by the assessee under the companies act and it is now the claim of the assessee that capital gain being exempted u s 54ec of die act should not be included in the book profit computed u s 115jb of the act. It is a basic principle that not all receipts constitute income to attract the levy of tax under the act.

Receipts which are not revenue are capital receipts e g. Cash from the sale of fixed assets either tangible or intangible. Receipts which arise in course of normal business activities are revenue receipts. Ordinarily tax is levied on income but not on capital profits.

Can also include a payment associated with an insurance claim from a damaged fixed asset. What are capital receipts. Can capital receipts be subject to tax under mat. Can include common stock and preferred stock.

Receipts from sale of fixed assets or investments loan taken capital introduced. Government subsidies for capital investment in backward areas are capital receipts and thus to be excluded while computing book profits under the provisions of mat 4 july 2019 recently the calcutta high court in case of ankit metal power ltd1 the taxpayer dealt with the characterisation of incentives received on account of. Capital receipts and revenue receipts. Itat held that it is not in dispute that the subject mentioned receipt of rs.