Mat Credit Utilisation Entry

The mat credit may be reflected as mat credit entitlement a c the following entry is to be passed for recognizing the mat.

Mat credit utilisation entry. 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. Say balance 40000 could not be availed in 10 yrs profit and loss account dr. 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. 8 52 000 plus cess as applicable being higher than the mat liability.

This is with effect from ay 2018 19 prior to which mat could be carried forward only for a period of 10 ays. The asset may be reflected as mat credit entitlement. Rs 14 43 000 rs 12 48 000 rs 1 95 000. For example companies have started molding their accounting policies to post lower net profits.

Mat credit available rs. Rs 12 lacs advance tax rs. To mat credit entitlement account 50000 c at the time of writing down of mat credit entitlement. Now the question is whether the entire mat credit can be carried forward in subsiquent years and for the current year refund to be claimed is rs 2 lacs.

The mat credit is available in respect of mat paid under section 115jb of the income tax act 1961 with effect from asst. There is a credit of mat of 4 68 000 which can be carried forward to 15 assessment year. In the year of set off of credit the amount of credit availed should be shown as deduction from the provision of taxation on the liabilities side of the balance sheet. Mat liability excluding cess and surcharge 15 on rs 18 40 000 will come to rs.

Such tax credit shall be carried forward for 15 assessment years immediately succeeding the assessment year in which such credit has become allowable. 10 lacs tax liability. Rs 10 lacs rs 12 lacs instead of rs 10 lacs ie. This is being done so that the chances of falling under regular corporate taxes are increased and accumulated.

Mat credit under section 115jaa. A domestic company is taxable at the rate of 25 if its turnover or gross receipt does. Hope its clear. 8 lacs mat credit rs.

Thus the tax liability of sm energy pvt. Although mat credit is not a deferred tax asset under as 22 but it can be considered as an asset and the same should be presented under the head loans and advances considering it is of the nature of a pre paid tax.