Mat Credit Section

Section 115jb has been inserted from the a y 2001 02.

Mat credit section. One can find provisions relating to carry forward and adjustment of mat credit in section 115jaa. 5 2 1 further as there is no time line within which option under section 115baa can be exercised it may be noted that a domestic company having credit of mat may. Set off is granted to the amount of difference between the tax on the total income and tax which would have been payable as per mat under section 115jb. Minimum alternative tax mat and its computation of book profit and mat credit under section 115jb of income tax act 1961.

Amount of mat credit mat normal tax liability rs. Mat credit is allowed to set off when tax is paid on the regular income under the provisions of income tax instead of mat. When any amount of tax is paid as mat by the company then it can claim the credit of such tax paid in accordance with the provision of section 115jaa. 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.

No interest is paid on the mat credit to the company. If it so desires exercise the option after utilising the said credit against the regular tax payable under the taxation regime existing prior to promulgation of the ordinance. Tax paid as per mat calculation income tax payable under normal provision of income tax act 1961. Mat credit will be.

What is mat credit. 8 4 lakh rs. Cbdt clarification on section 115baa after promulgation of taxation laws amendment ordinance 2019 cbdt issued circular no 29 2019 dated 02 10 2019 and clarified the position on additional depreciation under section 32 1 iia and mat credit for mat under section 115jb if tax rate under section 115baa and 115bab is opted from ay 2020 21. 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 under section 115jaa. It provides that in case the tax liability of a company is less than 7 5 10 from a y 2007 08 sc ec of the book profit such book profit shall be deemed to be the total income chargeable to tax at the rate of 7 5 percent 10 percent from the a y 07 08 sc ec. Carry forward mechanism for mat credit.