Mat Credit Accounting Guidance Note

1 whether mat credit is a deferred tax asset.

Mat credit accounting guidance note. 1983 times file size. Mat credit may be considered as a deferred tax asset for the purpose of accounting standard as 22 which relates to accounting for taxes on income. The guidance note on accounting for credit available in respect of minimum alternative tax under the income tax act 1961 as issued by icai gn a 22 issued 2006 further stipulated that. Guidance note on accounting for credit available in respect of minimum alternative tax under the income tax act 1961 guidance note on accounting for real estate transactions revised 2012 guidance note on measurement of income tax for interim financial reporting in the context of as 25.

It may be noted that the institute had in the year 1997 issued a guidance note on accounting in respect of minimum alternative tax which dealt with the recognition. On 18 may 2009. This guidance note to deal with the aspects of accounting and presentation of mat paid and the credit available in this regard. The guidance note on accounting for mat credit suggests the following.

Full guidance note including treatment in accounts in response to provisions of i t. Mat credit is an asset because it can be used in the future within specified period to set off mat credit against the normal tax liability and hence it. However when the mat credit is not considered as a deferred tax asset it is still to be considered as an asset and the same should be classified under the head loans and advances. Mat credit is not a deferred tax asset as per as 22 on accounting for taxes on income issued by icai deferred tax liability or deferred tax asset arises on account of timing differences i e.

Guidance note on accounting for credit available in respect of minimum alternative tax under the income tax act 1961 23 03 06. Other files by the user. In which mat credit becomes eligible to be recognized as an asset in accordance with recommendations contained in this guidance note the said asset should be created by way of a credit to the profit loss account presented as a separate line item therein. Act 1961 pdf submitted by.

The grant of credit for minimum alternative tax mat paid under section 115jaa of the income tax act 1961 has raised some issues regarding accounting for mat paid and the credit available thereon. Mat credit entitlement will be treated as an asset and the accounting will be done by crediting the profit loss a c if there is a virtual certainty that the company will be able to recover the mat credit entitlement in future limited period.