advanced taxation (cfap5) by fawad hassan [lecture2]
Post on 11-Apr-2017
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Minimum TaxSection 113Section 113C
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[S-113] Minimum Tax on Income of Certain PersonsMinimum Tax
CompanyResident Turnover 10 million or aboveIn TY 2017 or after
Tax payable is less than 1% of TurnoverDue to:(i) Loss of the year(ii) Set off of loss of earlier year(iii) Exemption from tax(iv) Tax Credits OR Rebates(v) Allowances/Deductions (including Depreciation & Amortization)
IndividualAOPSpecific Conditions
General Conditions
Turnover shall be treated as income Pay tax on basis of turnover @ 1st Sched, Part-I, Div-IX The excess tax paid due to minimum tax, shall be carried forward for adjustment against tax liability upto 5 subsequent tax years
Tax Payable shall not include:(i) Final Tax u/s 169(ii) Tax Payable u/s 4B
Turnover means:Gross Sales
Gross Fees
Gross Fees
Share of profit from AOP
ExcludingSales TaxFEDTrade DiscountDeemed income on which Final Tax has been paidDeemed income on which Final Tax has been paidDeemed income on which Final Tax has been paid
IncludingCommission
Turnover means:Gross Sales
Gross Fees(Services)Gross Fees(Contracts)Share of Company in AOP in above amounts
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[S-113C] Alternate Corporate TaxMinimum Tax
CompanyTax Payable under NTR
Minimum TaxHigher
Corporate Tax
In case of Section 113, C/f upto5 subsequent Tax Years
Alternate Corporate TaxHigher
Tax Payable
C/f upto10 subsequent Tax Years
Alternate Corporate TaxAccounting Profit before Tax(excluding share from associate under Equity Method of accounting)Less:Exempt IncomeIncome other than under NTRIncome subject to Tax Credit u/s 65D, 65E, 100CProportionate Expenses relating to above incomeAccounting Income@ 17% = Alternate Corporate TaxLess:Tax Credit u/s 64BTax Credit u/s 65BTax Payable
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(11)(11)(11)370
11.90(1)(1)
9.90
Other than:i. Insurance Co.[4th Sched]ii. Petroleum & Mineral deposit exploration[5th Sched]iii. Banking Co.[7th Sched]
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Alternate Corporate Tax Practice-ITax under NTRMinimum Tax u/s 113Alternate Corporate Tax
10,000,00014,000,00020,000,000
Company
Tax Payable under NTR10,000,000Minimum Tax14,000,000
HigherCorporate Tax14,000,000
4,000,000 C/f upto5 subsequent Tax Years
Alternate Corporate Tax20,000,000
HigherTax Payable20,000,000
6,000,000C/f upto10 subsequent Tax Years
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Alternate Corporate Tax Practice-IITotal RevenueTotal ExpenseAccounting Profit before taxTaxable Income under NTRTotal Revenue comprise of following:i. Exemptii. Taxable
200,000,00050,000,000150,000,00025,000,000
70,000,000130,000,000
Alternate Corporate TaxAccounting Profit before Tax(excluding share from associate under Equity Method of accounting)Less:Exempt IncomeIncome other than under NTRIncome subject to Tax Credit u/s 65D, 65E, 100CProportionate Expenses relating to above incomeAccounting Income@ 17% = Alternate Corporate TaxLess:Tax Credit u/s 64BTax Credit u/s 65BTax Payable
150,000,000
(70,000,000)0017,500,00097,500,00016,575,000
(0)(0)16,575,000
Proportionate Expenses50 x 70 / 200
Company
NTR tax @ 31%7,750,000
Minimum Tax2,000,000
HigherCorporate Tax
7,750,000
Nothing C/f upto5 subsequent Tax Years
Alternate Corporate Tax16,575,000
HigherTax Payable16,575,000
8,825,000 C/f upto10 subsequent Tax Years
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