24 November 2008
The MAT credit may be reflected as "MAT CREDIT ENTITLEMENT A/c" The following entry is to be passed for recognizing the MAT credit as Asset:
MAT Credit Entitlement A/c Dr.
To Profit and Loss A/c
While availing the MAT Credit, the following entry is to be passed:
Provision for Taxation A/c Dr
To MAT Credit Entitlement A/c
MAT credit should be reviewed at each balance sheet date. While writing down the carrying amount of MAT Credit entitlement, the following entry is to be passed:
Profit and Loss A/c Dr.
To MAT Credit Entitlement A/c
The difference between MAT paid and MAT Credit Entitlement can be treated as tax paid during the year.
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