TaxHeal - GST and Income Tax Complete Guide Portal

(Last Updated On: February 10, 2017)

Finance Bill 2017 proposed to amend section 115JAA and 115JD of Income tax Act so as to provide that the amount of tax credit in respect of MAT/ AMT shall not be allowed to be carried forward to subsequent year to the extent such credit relates to the difference between the amount of foreign tax credit (FTC) allowed against MAT/ AMT and FTC allowable against the tax computed under regular provisions of Act other than the provisions relating to MAT/AMT.

It is further proposed to amend sub-section (3A) of the said section so as to extend the period for carry forward of tax credit from tenth assessment year to fifteenth assessment year.

These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-19 and subsequent years.

Relevant Clause 46 of Finance Bill 2017

Amendment of section 115JAA.

46. In section 115JAA of the Income-tax Act, with effect from the 1st day of April, 2018,—

(a) in sub-section (2A), after the proviso, the following proviso shall be inserted, namely:—

“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.”;

(b) in sub-section (3A), for the words “tenth assessment year”, the words “fifteenth assessment year” shall be substituted.