In the previous year 2010-11 the tax as per income tax profit was 5 Cr and as per MAT Provision the liability was for 7.5 Cr. SO the assessee paid the amount of 7.5 Cr and made the provision for Tax with 7.5 Cr in the books of account.
But in next FY 2011-12 he has to pay the normal tax as per the income tax profit amount of Rs 7 Cr and there is no MAT Provision in the FY 2011-12.So, I need to know the following thing: (i) In FY 2010-11 assessee had to make the entries of Mat credit in Profit and Loss account as well as Balance sheet with 2.5 Cr. (ii)Can Assessee get the MAT Credit in the FY 2011-12 with the 2.5 Cr and if yes what should be the entries in books of account as he is only paying the amount of tax amount of Rs 4.5 Cr because of MAT Credit.
Kindly suggest me the same, I would be thankful to you.
CAclubindia
