Mat Credit Utilisation Limit

Utilise the mat credit they had carried forward from earlier years.

Mat credit utilisation limit. Such tax credit shall be carried forward for 15 assessment years immediately succeeding the assessment year in which such credit has become allowable. In the assessment year when regular tax becomes payable the difference between the regular tax and the tax computed under mat for that year will be set off against the mat credit available. This is with effect from ay 2018 19 prior to which mat could be carried forward only for a period of 10 ays. Unabsorbed mat credit will be allowed to be accumulated subject to the seven year carry forward limit.

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. Providing relief to assessees paying minimum alternate tax mat finance minister arun jaitley proposed to enhance the time limit to claim mat credit from the existing 10 years to 15 years. Mat liability excluding cess and surcharge 15 on rs 18 40 000 will come to rs. If a company has mat credit of rs.

10 lakh while that as per the. 1 lakh the tax liability as per the normal provisions for fy 2019 20 is rs. Rs 12 lacs advance tax rs. As stated above only the difference between mat paid and tax liability under provisions of the act is allowed to be carried forward as mat credit the cag has analysed 88 cases in 15 states wherein the assessee had received an undue benefit of under assessment by the assessing officer a o and consequently an undue carry forward of hefty mat.

219 could be held applicable even to mat credit. The credit allowed will not bear any interest. The mat credit and carry forward provisions indicate that it was always the intention. Rs 14 43 000 rs 12 48 000 rs 1 95 000.

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. 8 52 000 plus cess as applicable being higher than the mat liability. 10 lacs tax liability. In the assessment year when regular tax becomes payable the difference between the regular tax and the tax computed under mat for that year will be set off against the mat credit available.

Mat credit available rs. Rs 10 lacs rs 12 lacs instead of rs 10 lacs ie. Tax experts welcomed the move to reduce the corporate tax reduction to 25 per cent for msmes with turnover up to rs 50 crore. When mat credit and advance tax are treated equally or when mat credit is considered as advance tax the principle underlying s.

The mat credit and carry forward mechanism was again introduced from 2005 with a carry forward of 5 years which has been increased over the years to 10 years and now since 2018 to 15 years. Currently tax credit can be carried forward up to the 10th. 8 lacs mat credit rs. In case of conversion of the company into a limited.

As credit for advance tax is allowed to the person who makes payment of such tax similarly set off of mat credit should be allowed only to that company which pays mat.