Adjusted Taxable Income

Definition of ATI -

Taxable income of any person for any income year calculated without reducing following amounts.



• Amount under Section 12 (Donation)
• Deduction u/s 14(2) (Interest expense and interest income)
• Deduction u/s 17 (pollution control cost)
• Deduction u/s 18 (R&D cost)



As per Directives -



Calculation of ATI for section 12

for calculation of ATI for section 12 (Donation) calculate ATI by deducting actual Interest expense and income, actual pollution control cost and actual R&D cost.



For Calculation of ATI under section 14(2)

Calculate ATI without deducting any of the amounts u/s 12 (Donation) as well as interest income and interest expenses. deduct actual pollution control and R&D cost.



For Calculation of ATI under section 17

Calculate ATI without deducting any of the amounts u/s 12 (Donation) as well as Pollution control cost. deduct actual R&D cost as well as actual interest income and expenses.



For Calculation of ATI under section 18

Calculate ATI without deducting any of the amounts u/s 12 (Donation) as well as R&D cost. Deduct actual pollution control cost as well as actual interest income and expenses.



Income tax directives and Income tax act give conflicting results. We have to follow the directives.



Summary - Do not deduct Donation cost in any case and for 14, 17, and 18, Do not deduct such expenses for which ATI is to be calculated and deduct other expenses in actual basis.