Section 115JC — Case Laws & Commentary

CHAPTER XII-BA — SPECIAL PROVISIONS RELATING TO CERTAIN PERSONS OTHER THAN A COMPANY (ALTERNATE MINIMUM TAX)

SECTION 115JC — SPECIAL PROVISIONS FOR PAYMENT OF TAX BY CERTAIN PERSONS OTHER THAN A COMPANY

Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · Live Provision — the AMT charging section

Status: LIVE. Section 115JC is the charging provision of the Alternate Minimum Tax (AMT). Chapter XII-BA was first inserted by the Finance Act, 2011, with effect from 1 April 2012 (assessment year 2012-13), levying AMT on limited liability partnerships alone. The Finance Act, 2012 substituted and widened the Chapter with effect from 1 April 2013 (assessment year 2013-14) so as to bring within AMT every person other than a company that claims the specified profit-linked deductions.

Rate and carve-out history: Standard rate eighteen and one-half per cent. A reduced rate of nine per cent applies to a unit in an International Financial Services Centre deriving income solely in convertible foreign exchange (introduced with the IFSC incentive regime by the Finance Act, 2018), and fifteen per cent to a co-operative society (Finance Act, 2022, with effect from assessment year 2023-24). Sub-section (5) — substituted by the Finance Act, 2023 (Act No. 8 of 2023), with effect from 1 April 2024 — switches AMT off where the person has exercised the option under section 115BAC(5)/115BAD(5)/115BAE(5) or is taxed under section 115BAC(1A) (the default new personal regime).

Finance Act, 2026 impact: None. The Finance Act, 2026 does not amend section 115JC or any provision of Chapter XII-BA. (Its only change in this part of the Act is to section 115JB MAT — an extended carve-out for certain non-residents under the presumptive regime.) Section 115JC therefore stands for AY 2026-27 exactly as amended up to the Finance Act, 2025.

A. SECTION COMMENTARY

A.1 Purpose and place in the scheme

Section 115JC is the non-corporate mirror of the Minimum Alternate Tax (MAT) on companies under section 115JB. Profit-linked deductions — those grouped under heading “C.—Deductions in respect of certain incomes” in Chapter VI-A (sections 80-IA, 80-IAB, 80-IAC, 80-IB, 80-IC, 80-ID, 80-IE, 80-JJAA and the like), the deduction for a Special Economic Zone unit under section 10AA, and the investment-linked deduction under section 35AD — can lawfully reduce a non-corporate assessee’s tax to a very small figure or to nil. AMT places a floor under that result. Where the regular income-tax payable for a year by a person other than a company is less than the alternate minimum tax payable for that year, the “adjusted total income” is deemed to be the total income and is taxed at eighteen and one-half per cent (or the reduced category rate). AMT is thus an anti-erosion levy, not an independent head of charge: it secures a minimum contribution from a taxpayer who has otherwise legitimately availed of profit-linked incentives.

A.2 How the charge works — the operative scheme (editorial summary)

This is an editorial summary to make the case law intelligible; it is NOT a verbatim reproduction (the verbatim text appears in Part B). Sub-section (1) imposes the charge: if regular income-tax < AMT, adjusted total income is deemed total income and taxed at eighteen and one-half per cent. Sub-section (2) defines “adjusted total income” as the total income before giving effect to Chapter XII-BA, increased by (i) deductions claimed under any section other than section 80P falling under heading “C” of Chapter VI-A, (ii) the section 10AA deduction, and (iii) the section 35AD deduction (net of the section 32 depreciation that would otherwise have been allowable). Sub-section (3) requires the person to obtain and furnish, before the specified date in section 44AB, a report from an accountant (Form 29C, prescribed by Rule 40BA) certifying the adjusted total income and the AMT. Sub-section (4) substitutes the rate of nine per cent for an IFSC unit and fifteen per cent for a co-operative society. Sub-section (5) excludes a person who is in, or has opted into, the concessional/new regimes under sections 115BAC, 115BAD and 115BAE.

A.3 Core doctrinal themes

Theme (1) — AMT attaches to the previous year as a whole. The charge operates on a person for a previous year; it cannot be switched on for some streams of income and off for others. Consequently there is no “grandfathering” of a profit-linked claim (for example, a housing-project deduction under section 80-IB(10)) merely because the underlying project was approved before AMT was inserted. Once a specified deduction is claimed in a year falling on or after AY 2013-14, the comparison in sub-section (1) is made for the entire previous year (Vikram Developers; Vijay Tukaram Raundal).

Theme (2) — The trigger is the claiming of a specified deduction, not the presence of exempt income. AMT bites because a heading-C, section 10AA or section 35AD deduction has been claimed (and the section 115JEE applicability and threshold conditions are satisfied), not because the assessee earns any tax-free income as such.

Theme (3) — AMT is built on “total income” computed under the normal provisions, then adjusted. This is a structural contrast with MAT, which is built on the book profit of a company. Under AMT the regular computation must still be made in full — including the very deduction that is then added back — because both “regular income-tax” and “adjusted total income” are derived from it.

B. STATUTORY POSITION (verbatim)

Reproduced verbatim from the Income-tax Act, 1961 (Bare Act, as amended by the Finance Act, 2025; unchanged by the Finance Act, 2026):

Special provisions for payment of tax by certain persons other than a company.

115JC. (1) Notwithstanding anything contained in this Act, where the regular income-tax payable for a previous year by a person, other than a company, is less than the alternate minimum tax payable for such previous year, the adjusted total income shall be deemed to be the total income of that person for such previous year and he shall be liable to pay income-tax on such total income at the rate of eighteen and one-half per cent.

(2) Adjusted total income referred to in sub-section (1) shall be the total income before giving effect to this Chapter as increased by— (i) deductions claimed, if any, under any section (other than section 80P) included in Chapter VI-A under the heading “C.—Deductions in respect of certain incomes”; (ii) deduction claimed, if any, under section 10AA; and (iii) deduction claimed, if any, under section 35AD as reduced by the amount of depreciation allowable in accordance with the provisions of section 32 as if no deduction under section 35AD was allowed in respect of the assets on which the deduction under that section is claimed.

(3) Every person to whom this section applies shall obtain a report, before the specified date referred to in section 44AB, in such form as may be prescribed, from an accountant referred to in the Explanation below sub-section (2) of section 288, certifying that the adjusted total income and the alternate minimum tax have been computed in accordance with the provisions of this Chapter and furnish such report by that date.

(4) Notwithstanding anything contained in sub-section (1), where the person referred to therein, is a— (i) unit located in an International Financial Services Centre and derives its income solely in convertible foreign exchange, the provisions of sub-section (1) shall have effect as if for the words “eighteen and one-half per cent”, the words “nine per cent” had been substituted; (ii) co-operative society, the provisions of sub-section (1) shall have effect as if for the words “eighteen and one-half per cent”, the words “fifteen per cent” had been substituted.

(5) The provisions of this section shall not apply to a person, where— (i) such person has exercised the option referred to in sub-section (5) of section 115BAC or sub-section (5) of section 115BAD or sub-section (5) of section 115BAE; or (ii) income-tax payable in respect of the total income of such person is computed under sub-section (1A) of section 115BAC. [Sub-section (5) substituted by Act No. 8 of 2023, w.e.f. 1-4-2024.]

C. CASE LAW — CLUSTERED BY ISSUE

Cluster C-1 : No grandfathering — AMT applies to a profit-linked claim even where the underlying project was approved before AMT’s insertion

Deputy Commissioner of Income-tax v. Vikram Developers & Promoters, ITAT Pune Bench “B”, ITA No. 608/Pune/2020, A.Y. 2014-15, order dated 10 January 2023 [TS-21-ITAT-2023(PUN)].

Facts: The assessee, a non-corporate entity (firm), engaged in developing a housing project eligible for deduction under section 80-IB(10), filed its return without giving effect to section 115JC. The Assessing Officer held that section 115JC, introduced with effect from 1 April 2013, applied, worked out the adjusted total income and taxed it under that section. The Commissioner (Appeals) deleted the addition by following an earlier order of the Tribunal in the assessee’s own case for A.Y. 2013-14 which had favoured the assessee. The revenue appealed.

Issue: Whether section 115JC applies to the income of a housing project approved under section 80-IB(10) before the section was inserted, or whether such pre-insertion projects are impliedly carved out.

Held: The Tribunal held that neither section 115JC nor section 80-IB(10) contains any stipulation excluding AMT for housing projects approved before AMT’s insertion. As section 115JC applies to a previous year, it cannot be construed to have applicability in part qua other incomes and inapplicability in respect of income from a housing project approved under section 80-IB(1) before the section came into force. The revenue’s appeal was allowed and AMT was held to apply.

Ratio / why it matters: AMT is a year-based charge. The comparison under sub-section (1) is struck for the previous year as a whole. There is no implied grandfathering for profit-linked deductions claimed in a year on or after AY 2013-14, irrespective of when the underlying project or activity was sanctioned. This is the leading directly-on-point authority on the temporal reach of section 115JC.

Relevance to this section: Establishes the central litigated proposition under section 115JC — that the section’s commencement (AY 2013-14) governs the year of claim, not the year of project approval, and that AMT cannot be confined to part of a previous year’s income.

Source: ITAT Pune Bench “B” · ITA No. 608/Pune/2020 · TS-21-ITAT-2023(PUN) · digested in the Bombay Chartered Accountant Journal, March 2023 (Jagdish Punjabi, CA & Devendra Jain, Advocate), item 59. Citation and ratio verified via BCAJ and Taxsutra.

Cluster C-2 : The Pune line confirmed — section 115JC not excluded for pre-insertion approved projects

Assistant Commissioner of Income-tax v. Vijay Tukaram Raundal [2023] 147 taxmann.com 53 (Pune-Trib.) (individual builder and developer; housing project approved 30 March 2007).

Facts / Issue: An individual claimed deduction under section 80-IB(10) for a housing project approved long before AMT was inserted, and computed adjusted total income under section 115JC. The question was whether section 115JC applies to such a pre-insertion approved project.

Held / Ratio: The Tribunal held that the provisions of section 115JC do not exclude their application in respect of housing projects approved under section 80-IB(1) prior to the insertion of section 115JC — AMT applies. (On the facts the deduction under section 80-IB(10) itself failed on a separate ground, because the five-year completion condition, which expired on 31 March 2012, was not met; but on the AMT question the Tribunal confirmed applicability.)

Relevance to this section: A second, independent Pune Bench decision reaching the same conclusion as Vikram Developers — the AMT trigger is unaffected by the date on which the underlying project was approved. Together the two orders represent the settled Tribunal position on section 115JC’s temporal reach.

Source: ITAT Pune Bench · [2023] 147 taxmann.com 53 (Pune-Trib.) · existence, parties and ratio verified via the Taxmann citation index and the Indian Kanoon listing (doc 50329554).

Cluster C-3 : Candour — the limits of the reported authority

In keeping with this treatise’s evidentiary discipline, it should be stated plainly that AMT-specific litigation is, to date, concentrated almost entirely on the single applicability question addressed in Clusters C-1 and C-2. There is no reported decision of the Supreme Court or of a High Court squarely construing section 115JC; the governing authorities are the two Pune Tribunal orders above. The rate carve-outs in sub-section (4) (IFSC unit, co-operative society) and the new-regime exclusion in sub-section (5) have not, as at the date of writing, generated reported judicial controversy — they are administered on the plain words of the statute. Where a proposition below rests on cognate MAT jurisprudence applied through section 115JE, that is expressly flagged (see the Section 115JD and 115JE files).

D. PRACTITIONER NOTES

(1) Run the AMT comparison whenever a firm, LLP, individual, HUF, AOP, BOI or artificial juridical person claims a heading-C Chapter VI-A deduction, a section 10AA deduction or a section 35AD deduction; AMT is easy to overlook because the regular computation may show little or no tax. (2) Obtain and furnish Form 29C (Rule 40BA) from an accountant by the specified date under section 44AB — the report is a substantive compliance, not a formality. (3) Do not assume grandfathering for old approved projects (Vikram Developers; Vijay Tukaram Raundal). (4) Check the new-regime carve-out in sub-section (5): AMT does not apply to a person taxed under section 115BAC(1A) or who has opted into section 115BAC(5)/115BAD(5)/115BAE(5). (5) Apply the correct category rate — nine per cent (IFSC unit), fifteen per cent (co-operative society) or eighteen and one-half per cent (all others). (6) Forward-looking note (not 1961-Act law): the corresponding AMT provision in the Income-tax Act, 2025 has been the subject of professional debate on whether non-corporate entities such as LLPs that claim no profit-linked deduction could be drawn within AMT; practitioners should watch for clarificatory action. This is noted only for context and does not affect the construction of section 115JC of the 1961 Act.