What Is Mat Credit Entitlement In India

Rs 14 43 000 rs 12 48 000 rs 1 95 000.

What is mat credit entitlement in india.

Such tax credit shall be carried forward for 15 assessment years immediately succeeding the assessment year in which such credit has become allowable. The asset may be reflected as mat credit entitlement. 10 lakh while that as per the. They do so by showing the mat credit as mat credit entitlement to the credit of the income and expenditure amount.

1961 issued by the institute of chartered accountants of india mat is the current tax. This is with effect from ay 2018 19 prior to which mat could be carried forward only for a period of 10 ays. Accordingly the tax expense arising on account of payment of mat should be charged at the gross amount in the normal way to the profit loss account in the year of payment of mat. If a company has mat credit of rs.

1 lakh the tax liability as per the normal provisions for fy 2019 20 is rs. The maximum amount of mat credit that you can claim cannot exceed the difference between the normal tax liability and the mat liability in the year for which the mat credit is being availed. If this circumstance does not arise and mat credit stays in the loans and advances column of the company s balance sheet till the end of the specified period after which it is simply written off.