MAT on conversion of Fixed Assets to Stock in trade
Sujit Talukder (service) (719 Points)
23 February 2009Sujit Talukder (service) (719 Points)
23 February 2009
madhur gupta
(student/article )
(1022 Points)
Replied 23 February 2009
i think mat will be applicable here,bcoz i wll pass the entry that:
stock..........dr 25000
to f.a..............10000
to reserve/p&l..........15000
if i transfer to p&la/c then i have to pay mat
and if i trnsfr to reserve then i will not get deduction unless i dont add it in book profits
it means i have to pass it through p/l a/c
rest u must confirm it n
do inform me also ,if possible
thankxxxxxxx
Sujit Talukder
(service)
(719 Points)
Replied 24 February 2009
Originally posted by :madhur gupta | ||
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Hi thanks for the reply, but I could not understand what deduction I will get if not passed through P&L.
Whether Companies Act allows to pass the unrealised profit to Reserve a/c? Rs 15,000 is unrealised right now.
madhur gupta
(student/article )
(1022 Points)
Replied 25 February 2009
yes u can transfer it to reserve
when we revalue asset then also we transfer it to revaluation reserve,that also is unrealized one
but here when u sold the goods later then obvious the cancel the reserve created.then it will be added back in computing book profits...
ANU GOYAL
(MANAGER)
(22 Points)
Replied 30 June 2009
Originally posted by :madhur gupta | ||
" | yes u can transfer it to reserve when we revalue asset then also we transfer it to revaluation reserve,that also is unrealized one but here when u sold the goods later then obvious the cancel the reserve created.then it will be added back in computing book profits... |
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hI Sujit, i am facing the same problem but i don't know the solution, if you have got the answer by now, please let me know. Thanking u in advance.
Yashpreet
(68 Points)
Replied 30 June 2009
hello
first of all i want to say that as per AS-2 nd income tax act stock is carried in the books
at m.p or cost whichever is less ......
second thing if u transfer the asset at higher price nd ransfer the profit to p& l a/c then as per mat
it will be reduced from the profits ... so no mat
vaibhav sharma
(JOB)
(42 Points)
Replied 30 June 2009
hi Sujit
Mat will be not applied for the F.Y 2008-09 as this gain is a capital gain and as while calculating MAT we have to calculate book profit on which MAT is applied and capital gain is not consider for calculating book profit.
so in this case MAT Calculation is not attracted.