26 November 2009
Hi friends, i have a doubt in my mind relating to DTA/DTL when the company pays MAT under income tax. Whether DTA will be created and if yes then upto what extent?
26 November 2009
When the company pays MAT, the credit for the same is available to the extent of MAT paid over normal tax liability of the company which shall be set off in the year when the company pays tax as per normal tax provisions. This is different from DTA as it does not fall under AS-22 and so in the balance sheet, the same shall not be included in DTA. It is shown under Loans and Advances as a seperate line item in the Schedule.
27 November 2009
Hi Vikas, ASI 6 issued by the institute provides the explanation for the above as under : a) payment made by an entity under 115JB is for current period. b)In the period in which a co. pays tax under 115JB, DTA or DTL inrespect of timing difference arising during the period , tax effect of which is required to be recognised under AS 22, should be measured using regular tax rates and not the MAT rates. It simply means that when you calculate DTA or Dtl, just ignore MAT and calculate it in usual way. then show current tax as current tax as per above calculation + MAT. Regards, CA Shakuntala Chhangani
CAclubindia
