03 October 2016
Respected All Suppose A Co. has Profit before Tax-Rs.750000/- & Brought forward losses of Rs.2308323 & Unabsorbed depreciation of Rs4004339. As per my calculation Co is liable to pay tax as per MAT Rs.142913/- (750000*18.5%+3%) My question is whether company should make provision for tax Rs.142913 & Mat credit with the same amount? (i.e. How to show in P/L and Balance Sheet)
03 October 2016
You have to pass the following entry for Provision for Tax Profit & Loss Account Dr. To provision for Tax And for the payment of MAT by any mode (Advance Tax/Self Assessment tax/TDS) Advance Tax Account Dr. TDS Account Dr. Self Assessment Tax A/c Dr To Cash/Bank A/c Means in Balance Sheet in Liability side You have Provision For Tax and Same Way in Asset side You have Income Tax account and that you have to C/f upto utilization in future. Thanks.
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