What is Form 29B?

Form 29B is a report that outlines a company’s book profits for a specific assessment year, required under Section 115JB of the Income Tax Act, 1961. It is prepared and certified by a Chartered Accountant (CA) to ensure the accurate computation of book profits and to facilitate the claiming of Minimum Alternate Tax (MAT) credit, if applicable.

Purpose of Form 29B:

1. Determine Applicability of MAT: It helps determine if MAT is applicable to the company based on its book profits.
2. Calculate MAT Liability: It calculates the MAT liability, if any.
3. Claim MAT Credit: It enables the company to carry forward and claim MAT credit in subsequent years when normal tax exceeds MAT.

Who Needs to File Form 29B?

• Companies whose income, as per the Income Tax Act, is less than 15% of their book profits (applicable from Assessment Year 2020-21 onwards).

Benefits of Filing Form 29B:

1. Accurate MAT Calculation: Ensures proper determination of MAT liability, helping avoid penalties for underpayment of taxes.
2. MAT Credit Availment: Enables the company to carry forward and claim MAT credit in future years when normal tax exceeds MAT, reducing future tax liabilities.
3. Compliance: Demonstrates adherence to tax regulations and maintains a good tax standing.

Due Date for Filing Form 29B:

• The due date is one month before the due date for filing the income tax return for the relevant assessment year.

Late Fees and Penalties:

• Late Fees: ₹500 per day of delay, with a maximum limit of ₹1,50,000.
• Penalty for Non-Filing: ₹1,50,000, as per Section 271B of the Income Tax Act.

Additional Information:

• MAT Rate: The current MAT rate is 15% of book profits.
• MAT Credit Carry Forward: MAT credit can be carried forward for up to 15 years.
• MAT Provisions: MAT provisions ensure that companies with significant book profits but lower taxable income (due to exemptions/deductions) pay a minimum level of tax.