13 October 2008
In your question tax is payable as per MAT provisions.
You cannot take credit in the year in which MAT is payable. Credit can only be taken in the year in which tax as per normal provosions is payable to the extent of following:- MAT Credit available - (TAx as per normal provisions - Tax as per MAT provisions)
13 October 2008
i kinda mistyped it in current yeat ,i also meant subsequent year .If in subsequent year ,if there are profits to cover the mat credit or absorb mat credit ,hw do u bring in mat credit to balance sheet??? in 1st year suppose income tax provision -50000 tax payable as per mat -70000 so in subsequent year u have i.t provision -80000 tax payable as per mat -40000 so now one can adjust the 20000 to income tax provision ... Then the entry would be
income tax paid 60000 mat entitlement 20000 to i.t provision 80000 does'nt the guidance note refer to mat credit being "Current Asset"?????
CAclubindia
