The finance ministry has notified draft accounting standards which would be used to compute the taxable income of businesses from April 1, irrespective of their declared book profits.
The only tax purpose for which book profits would be used from next fiscal would be to determine whether a company that claiming tax exemptions is liable to pay the 18.5% minimum alternate tax (MAT). Companies that do not pay the 30% corporate tax are liable to pay MAT if their tax liability, when tax breaks are excluded, falls below 18.5% of their book profit.