Mat Credit Adjustment

Rs 14 43 000 rs 12 48 000 rs 1 95 000.

Mat credit adjustment. I propose to introduce a minimum alternate tax mat on companies. 4 relevant extract of the budget speech 1996 97. Thus the tax liability of sm energy pvt. 8 52 000 plus cess as applicable being higher than the mat liability.

10 lakh while that as per the. For the purposes of mat book profits the ind as p l is completely ignored for purposes of mat book profits the following will apply. A tax credit scheme is introduced by which mat paid can be carried forward for set off against regular tax payable during the subsequent fifteen years period subject to certain conditions as under. 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.

Mat liability excluding cess and surcharge 15 on rs 18 40 000 will come to rs. The mat credit is available in respect of mat paid under section 115jb of the income tax act 1961 with effect from asst. Mat credit under section 115jaa. If a company has mat credit of rs.

Minimum alternative tax mat and its computation of book profit and mat credit under section 115jb of income tax act 1961. 1 lakh the tax liability as per the normal provisions for fy 2019 20 is rs. Such tax credit shall be carried forward for 15 assessment years immediately succeeding the assessment year in which such credit has become allowable. Under accounting standard as 22 discussed above though mat credit is not a deferred tax asset an expectation regarding future economic benefit arises in the form of the adjustment of the future income tax liability that arises within a specified time period.

This is with effect from ay 2018 19 prior to which mat could be carried forward only for a period of 10 ays. 2 whether mat credit can be considered as an asset. The minimum alternative tax mat is a provision introduced in direct tax laws to limit the tax deductions exemptions otherwise available to taxpayers so that they pay a minimum amount of tax to the government. There is a credit of mat of 4 68 000 which can be carried forward to 15 assessment year.

In a case where the total income of the company. The amount of mat credit can be set off only in the year. The amount of mat credit would be equal to the excess of mat over normal income tax liability for which mat is paid during the said assessment year. The maximum amount of mat credit that you can claim cannot exceed the difference between the normal tax liability and the mat liability in the year for which the mat credit is being availed.