'The provisions of section 115JB (Minimum Alternate Tax) are also applicable in case of foreign companies'. In the context of provisions contained in the Income Tax Act, 1961, examine the correctness of the above stateme

The statement is correct; since, there is no provision in section 115JB restricting its applicability to only domestic companies and therefore, section 115JB is applicable to both domestic and foreign companies. The provisions of section 115JB are applicable in the case of an assessee, being a company, where 15% of its book profit exceeds the tax payable on the total income computed under the normal provisions of the Act. Therefore, the provisions of section 115JB would be attracted both in the case of a domestic as well as a foreign company, if the tax payable on its total income is less than 15% of its book profit. However, section 115JB will not be applicable to a foreign company, if - The assessee is a resident of a country or a specified territory with which India has Double Taxation Avoidance Agreement under section 90 / 90A and the assessee does not have a permanent establishment in India in accordance with the provisions of such agreement; or The assessee is a resident of a country with which India has Double Taxation Avoidance Agreement and the assessee is not required to seek registration under any law for the time being in force relating to companies.