Skip to main content

Govt to study impact of MAT on firms under new accounting regime

By
As corporate India gears up to switch to a new accounting standard ( Ind- AS) from FY17, the government has set up a committee to assess the impact of minimum alternate tax (MAT) on companies under the new accounting regime.
The committee, supervised by the Central Board of Direct Taxes ( CBDT), has experts from the Institute of Chartered Accountants of India ( ICAI), taxation and senior officials of the tax department as its members. The committee will look at ways to resolve the differences, arising in MAT computation when a company adopts the International Financial Reporting Standards- compliant Ind- AS.
Several industry bodies had earlier made a representation to the CBDT that the issue of higher incidence of MAT on companies that follow the new accounting standard was making them cagey.
Speaking at a conference on financial reporting, Rajesh Kumar Bhoot, director, CBDT, said the committee was expected to submit its report by October. Tax experts said companies that were covered under MAT might experience significant increase in tax liability due to use of fair value method of accounting under Ind- AS.
“Due to increased use of fair value accounting under IndAS, unrealised gains on items such as derivatives, investments, etc., will get recognised in income statement, which is presently not done under Indian GAAP. Since, this will potentially increase the reported amount of accounting profits, it could also cause higher MAT outflows,” said Sumit Seth, partner and IFRS leader, PricewaterhouseCoopers.
Business Standard, New Delhi, 30th July 2015

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Healthy balance sheets augur well for economy: RBI Governor Sanjay Malhotra

By
  Large tariffs by the United States administration and elevated geopolitical risk have increased near-term global financial stability risks, and along with weather events pose downside risks to domestic growth, Reserve Bank of India(RBI) Governor Sanjay Malhotra said in the foreword to the Financial Stability Report released today.Noting that domestic growth momentum is buoyed by strong domestic drivers, sound macroeconomic fundamentals and prudent policies, Malhotra said: “External spillovers and weather-related events could pose downside risks to growth.”On the other hand, he said the outlook for inflation is benign, and there is greater confidence in the durable alignment of inflation with the Reserve Bank’s target.Commenting that the structural shifts reshaping the global economy are making policy intervention challenging, the Governor emphasised the need for central banks and financial sector regulators to remain vigilant, prudent and agile in safeguarding their economies and...
Post a Comment
Read more