Mat Set Off Calculation

8 52 000 plus cess as applicable being higher than the mat liability.

Mat set off calculation. As per the provisions of sub section 1a of section 1 15jaa of the act if tax is paid by any company under section 115jb then credit in respect of the tax so paid. Thus the tax liability of sm energy pvt. Losses made by the company are carried forward to. This is a rolling yearly sum so changes at the end of each month with data from the new month added to the total and data from the first month of the period taken away.

Set off of mat credit brought forward in allowed to the extent of the difference between tax on total income and tax which would have been payable under section 115jb of the act. Concept 3 carry forward loss. Analysis of provision of section 115jb where in case of a company the income tax payable on the total income as computed under the income tax act in respect of any previous year is less than 15 of its book profit then such book profit shall be deemed to be the total income of the assessee and the tax. Set off shall be allowed to the extent of difference between the tax on the total income under normal provision and tax which would have been payable as per mat under section 115jb.

The taxpayer relied on the delhi high court lilly company3 where similar methodology in the matter of carry forward and set off losses was accepted for mat purposes and was not interfered. The same is explained in the annexure. The minimum alternate tax mat provisions under income tax act were introduced tocounter the situations wherein domestic companieswere making significant profits and declaring dividends on consistent basis but were availing tax concessions and incentives in such a way as to minimize the payment of income tax mat provisionsare applicable for a company if the tax payable as per normal. 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 shall be allowed to be set off in a year when the tax becomes payable on the total income in accordance with the normal provisions of the act. Tags how moving annual total is calculated mat moving annual total the total value of a variable such as sales figures for a product over the course of the previous 12 months. The mat credit can be set off against tax payable in subsequent years up to ten assessment years immediately succeeding the assessment year in which the mat credit was earned. Forward of amount for set off in the succeeding year.

Unabsorbed mat credit will be allowed to be accumulated subject to the 10 years carry forward limit. The set off rule and period may be different in different geographical locations. However the cit a refused to interfere with the. Carry forward and set off of business losses section 72 special provisions regarding losses relating to companies only section 72a 72aa 72ab deductions out of gross total income in case of companies section 80g to 80la provision of mat minimum alternate tax for payment of tax by certain companies section 115jb.