Mat computation and tax liability

This query is : Resolved

CA Atihash Agarwal (Querist)
Follow

11 August 2012 KINDLY SOLVE MY QUERY.

MY MAT CREDIT IS RS 300000/-(B/F BALANCE)

CURRENT YEAR INCOME IS 150000/- AND TDS DEDUCTED IS 30000/-

NOW CURRENT TAX = 46350/-

TAX ON BOOK PROFIT(MAT) = 28582/-

NOW HOW MUCH SHOULD BE THE MAT CREDIT AVAILED AND THE TAX TREATMENT.

THE CALCULATION AS PER ME IS-
TAX ON REGULAR INCOME = 46350/-
TAX ON BOOK PROFIT(MAT)= 28582/-

HENCE TAX LIABILITY = 46350/-
LESS: MAT CREDIT = 46350/- ( this credit is taken from the old balance of 300000/- MAT credit)

SO NET TAX LIABILITY = NIL

MAT CREDIT LEFT=300000-46350= 253650/-

AND REFUND OF TDS=30000/-

IS THIS CALCULATION CORRECT?

KINDLY ADVISE.

THANX

Taxguy

Taxguy (Expert)
Follow

12 August 2012 Your computation is fine to me.
But coming from income tax return filling point of view,
you need to fill the Schedule MAT, MATC and BS and PL and BP correctly.

CA VISHNU GAVKARE

CA VISHNU GAVKARE (Expert)
Follow

12 August 2012 Dear Harsh,
MAT is Minimum tax which needs to be paid. In your case you can take a credit of MAT only to the Extent the excess of tax over MAT. Hence your Tax liability is 28,582.
you can take a credit of Rs. 17,768 (46,350 - 28,582). Balance in MAT credit will be Rs. 2,82,232 (3,00,000 - 17,768) and you can claim a refund of Rs. 1,418 (30,000 - 28582).

Upgrade to CAclubindia Pro. Subscribe Now!