I have calculated Mat as per the provisions of IT Act. my question is what is amt to be carried forward for the further years as credit. i spoke abt this with few friends and faculty members but im not surprised with their answers. As per my interpretation of sec provisions, it is said to take credit of said rate of Mat as credit, moreover it has not specifically said effective rate or inclusive of cess. Pls clarify the above.
We are using software for computation. it is taking credit of only tax rate amount but not cess.
25 September 2011
Stricly intrepreting the provisions of section 115JBA and also the other provisions of IT act etc. only the tax portion is eligible for MAT credit.i.e Surcharge and cess are not eligible. This is due to the fact that Tax does not include Surcharge and Cess which are collected for specific purposes by the union government. However, while u reduce the income on the normal income from the MAT Tax, there also take tax only witout surcharge and cess See eg below.
Tax under MAT 3600000 SC 270000 Cess 116100 Total Liability 3986100
tax Under Normal provisions 1500000 Cess 45000 Total 1545000 MAT Credit eligible to be carried forward would be 36 lakhs - 15 lakhs = 21 lakhs
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