Purpose of Disclosure in MAT Computation

• MAT computation notes explain how book profit is adjusted for tax purposes.
  
• They provide transparency in the reconciliation between accounting profit and MAT profit.
  
• These notes are essential for tax audit, statutory audit, and income tax assessments.
  
• They support the computation presented in Form 29B and the return of income.
  
• Proper disclosure reduces the risk of disputes and ensures compliance with Section 115JB.
  

Structure of Disclosure Notes

• Notes are typically annexed to the financial statements or tax audit report.
  
• The disclosure begins with the net profit as per the audited Profit and Loss Account.
  
• It then lists all additions and deductions made as per MAT rules.
  
• Each item is explained with the nature, amount, and relevant accounting reference.
  
• The final adjusted book profit and MAT payable are summarized at the end.
  

Common Additions and Deductions Shown

• Additions include income tax provisions, deferred tax, unascertained liabilities, and dividend proposed.
  
• Deductions include exempt income, SEZ profits, and brought forward losses or depreciation.
  
• Revaluation entries, impairment provisions, and OCI transfers are also disclosed where relevant.
  
• Items routed through Profit and Loss Account are specifically noted for MAT purposes.
  
• All adjustments are aligned with Explanation 1 to Section 115JB.
  

Linkage to Financial Statements and Forms

• Each adjustment in MAT notes is cross-referenced with line items in the financial statements.
  
• Disclosures should reconcile with Form 29B submitted electronically.
  
• Supporting schedules and working notes may be provided in annexures.
  
• Notes must match the values reported in audited accounts and tax filings.
  
• Reconciliation enhances reliability and accuracy of MAT computation.
  

Audit and Documentation Requirements

• The auditor certifies MAT adjustments in Form 29B based on these disclosures.
  
• Companies must retain documentation for each adjustment entry.
  
• Supporting records include calculations, ledgers, board approvals, and accounting memos.
  
• Any judgments or estimates used must be clearly explained in notes.
  

Disclosure ensures alignment with audit standards and income tax provisions.