Mat Credit Entitlement Meaning

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 when a company pays tax under mat the tax credit earned by it shall be an amount which is the difference between the amount payable under mat and.

Mat credit entitlement meaning.

So excess tax payable will be rs 1 48 000 rs. Such tax credit shall be carried forward for 15 assessment years immediately succeeding the assessment year in which such credit has become allowable. This excess rs 28 000 can be carried forward and set off against regular tax payable in future. 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.

However applicable mat 18 5 of rs 8 lac rs. 1 lakh the tax liability as per the normal provisions for fy 2019 20 is rs. 10 lakh while that as per the. To mat credit entitlement account.

8 52 000 plus cess as applicable. Mat credit entitlement loans and advances dr 20 to mat expenses indirect expenses 20 summarizing the above situation the expenses debited to profit and loss will be rs 80 balance in mat expenses a c short term provisions shows mat payable of rs 100. It must also be noted that deferred tax charge is not covered by any other clause of the explanation to section 115jb 2 and is therefore not required to be added back in the computation of book. Mat liability excluding cess and surcharge 15 on rs 18 40 000 will come to rs.

The unavailed amount of mat credit entitlement if any should continue to be presented under the head loans advances. Meaning of book profit as per explanation 1 to section 115jb 2 book profit for the purposes of section 115jb means. The difference arising out of mat paid and mat credit entitlement can be treated as tax paid during the year. They do so by showing the mat credit as mat credit entitlement to the credit of the income and expenditure amount.

All companies that are liable to pay mat have to furnish a mat report as prescribed in form 29b. If a company has mat credit of rs. Rs 14 43 000 rs 12 48 000 rs 1 95 000. This is with effect from ay 2018 19 prior to which mat could be carried forward only for a period of 10 ays.

Just because companies opting for lower tax are spared of mat it should not mean they cannot claim past mat credit. Thus the tax liability of sm energy pvt. The asset may be reflected as mat credit entitlement.