06 March 2010
As per Finance Act, 2009, the period of carry forward of MAT credit has been extended from 7 asst yrs to 10 asst yrs succeeding the AY in which the MAT credit becomes allowable. Whether this amendment is applicable to the existing MAT credits also, apart from new credits.
Section 115JAA (1A) Where any amount of tax is paid under sub-section (1) of section 115JB by an assessee, being a company for the assessment year commencing on the 1st day of April, 2006 and any subsequent assessment year, then, credit in respect of tax so paid shall be allowed to him in accordance with the provisions of this section.
Section 115JAA(3A) reads as under:
(3A) The amount of tax credit determined under sub-section (2A) shall be carried forward and set off in accordance with the provisions of sub-sections (4) and (5) but such carry forward shall not be allowed beyond the 15a[seventh] assessment year immediately succeeding the assessment year in which tax credit becomes allowable under sub-section (1A).]
15a. The word tenth is substituted for the word seventh by the Finance (No 2)Act, 2009.
It is therefore very clear from the aforesaid provisions that the extended period of 10 years shall be allowed to existing as well as new credits.
There is no seperate provision of 7 years for existing credits and of 10 years for the new credits.
There is only one provision of 10 years. This provision shall apply, both to, existing as well as new credits.
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