Your MAT Tax Can Drop—But Only If Form 29B Is Filed Right

If you’ve ever worked on corporate tax filings, you already know that calculating tax under the normal Income Tax Act provisions & calculating tax under MAT can produce two different numbers. And in cases where the normal tax payable falls below a minimum threshold, the law steps in through Section 115JB to ensure companies contribute at least a minimum tax.
This is where Form 29B becomes critical — it serves as the official audit report that certifies the book profit used for MAT calculation.

Unlike many routine compliance forms, Form 29B is not a self-declaration. It has to be certified by a Chartered Accountant, making it an essential document for ensuring both accuracy and legal conformity.

What Exactly Is Form 29B?

Form 29B is a compulsory audit report for companies covered under Section 115JB, which deals with Minimum Alternate Tax (MAT). The form is used to:

• Compute & certify the company’s book profit.
• Confirm that MAT liability has been properly determined.
• Disclose whether the income is less than 15% of the book profit, triggering MAT.
• Validate compliance so that the total income of the company reflects the correct MAT impact.

In simple words, Form 29B is the bridge between company financial statements & MAT computation. It ensures no company bypasses the minimum tax requirement through adjustments or exemptions.

Why Form 29B Matters

Companies often show high book profits under the Companies Act but low taxable income under normal tax rules because of exemptions, incentives, or depreciation differences. To avoid a situation where profitable companies pay little or no tax, MAT was introduced.

Form 29B ensures:

• MAT is applied uniformly & correctly.
• Book profits are not understated."
• A certified CA verifies every adjustment made to compute MAT.
• Transparency and accountability in corporate taxation.

The requirement is not optional. Every company liable to MAT must furnish Form 29B before filing its income tax return.

Also Read: Form 26AS: The One Document That Knows Everything About Your Income

When Is Form 29B Required?

Form 29B becomes mandatory in the following situations:

1. When the company’s income is less than 15% of its book profit

If tax payable under normal provisions falls below the MAT rate, Form 29B must be filed with the MAT computation.

2. When MAT under Section 115JB is triggered

MAT becomes applicable even if the company is enjoying tax holidays or exemptions.

3. When book profit needs certification by a Chartered Accountant

The Assessing Officer is not obligated to accept unaudited figures. Certification is the safeguard.

4. When the company wants to claim MAT credit

Future MAT credit adjustments rely on a correctly filed Form 29B.

Key Information Included in Form 29B

A typical Form 29B includes:

• Details of total income of the company under normal provisions
• Adjustments required under Section 115JB
• Computation of book profit
• Whether normal tax is below MAT threshold
• Confirmation that the company complies with the Ministry of Corporate Affairs financial reporting rules
• A CA-certified declaration that MAT computation is accurate

This level of detail ensures MAT is neither under-calculated nor arbitrarily imposed.

How Form 29B Works With Section 115JB (MAT)

To understand Form 29B, you must look at the logic behind MAT:

1. Calculate tax under normal income tax provisions.
2. Calculate 15% of book profit (or the prevailing MAT rate).
3. Compare both numbers.
4. If normal tax is lower, MAT must be paid.
5. Form 29B certifies this comparison & the accuracy of book profit.

The Assessing Officer relies heavily on this certified form when finalizing corporate tax assessments.

Also Read: MLI Full Form (Multilateral Instrument): A Global Step Against Tax Avoidance

Common Issues Companies Face With Form 29B

1. Wrong computation of book profit

Adjustments under MAT are precise. Missing even one item can alter liability significantly.

2. Filing Form 29B after the deadline

Late filing can make the ITR defective & attract penalties."

3. Incorrect MAT credit calculations

Errors here affect multiple assessment years.

4. Partial or unclear reporting

Ambiguity invites scrutiny, leading to notices, delays, and disallowances.

Practical Example to Simplify MAT & Form 29B

Suppose a company has:

• Book Profit: ₹8 crore
• Income as per Income Tax Act: ₹1 crore
• Normal tax: ₹26 lakh
• MAT @ 15%: ₹1.2 crore

Even though normal tax is low, MAT applies because income is less than 15% of the book profit.
The company must file Form 29B, certified by a CA, to validate this computation.

Best Practices for Companies Filing Form 29B

• Keep audited financial statements ready before MAT computation.
• Reconcile all differences between Companies Act profit & taxable profit.
• Ensure your CA certifies every adjustment clearly.
• File Form 29B well before the ITR deadline to avoid last-minute issues.
• Maintain working papers for future MAT credit claims.

Also Read: Section 12BA: The Form Every Employer Must File for Employee Perquisites

Conclusion

Form 29B is more than a compliance requirement — it is the backbone of the MAT framework under Section 115JB. By certifying book profits & ensuring companies pay at least the minimum level of tax, it strengthens transparency in corporate taxation.
For any company where income is less than 15% of book profit or MAT becomes applicable, Form 29B is non-negotiable and must be filed before submitting the income tax return.

If you want professional help in computing MAT, preparing Form 29B, or reviewing book profits, the CA experts at CallMyCA.com can assist you end-to-end — your compliance accuracy starts with one click.