Claiming STT rebate against MAT

Hi Mr Gala,

I don't see any reason why STT can't be claimed against MAT profits. Section 88E lays down the pre-requisite that to be eligible to claim rebate on account of Securities Transaction Tax, the assessee must have income under the head "Profits and gains of business and profession". Now Chapter XII-B of the Act, which contains Section 115JB that levies MAT, is titled "Special provisions relating to certain companies". Section 115JB requires companies to shell out a minimum of 10 per cent of their book profits towards income tax. If the tax by regular computation doesn't work out to that amount, an amount equal to 10% of the book profits of the company acts as the company's surrogate Total Income. This method bypasses the normal method of computation of total income whereby we determine the income under each head and then aggregate them to arrive at the figure of total income. Just because Section 115JB creates a fictional total income, it shouldn't mean we lose the right to examine the individual components of that income. Section 115JB doesn't lay down any new definition of the term "total income". It merely provides for an alternative method of finding out the total income in certain situations. So going by the usual definition of total income, we can still argue that the total income even if it is determined in an ad hoc fashion u/s 115JB continues to have its components—like the business income, house property income, capital gains and so on. Since the company had had business profits, it would be eligible to claim STT rebate u/s 88E irrespective of the fact that it's had to arrive at its total income in the manner it was required to under Section 115JB. I think you can assign weights based on the composition of your regular total income to the total income computed u/s 115JB to determine the percentage share of the business income from securities transactions therein. But then where's the need to do it? You already have the average rate of tax in MAT—10 per cent. Just apply this rate to the income from the STT transactionsThanks,CA Sanjeev Bedi--- In ICAI_CIRC_MEERUT_ CA@yahoogroups. com, "galavilas" wrote:>> Hello,> Can anybody advice me if We can claim STT rebate against tax payable> under section 115JB(MAT).An early reply will be highly appreciated.> > Vilas M. Gala