What Is Mat Credit Entitlement In India

The total mat paid during the tax holiday period is available as mat credit to be adjusted against the regular tax liability at a later point.

What is mat credit entitlement in india.

The asset may be reflected as mat credit entitlement. 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. 1961 issued by the institute of chartered accountants of india mat is the current tax. As per the law this credit say rs 150 crore can be used to lower the regular tax liability at the end of the tax holiday.

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. Rs 14 43 000 rs 12 48 000 rs 1 95 000. Such tax credit shall be carried forward for 15 assessment years immediately succeeding the assessment year in which such credit has become allowable. They do so by showing the mat credit as mat credit entitlement to the credit of the income and expenditure amount.

10 lakh while that as per the. 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.