Accounting of MAT credit

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This query is : Resolved

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This discussion addresses how to re-enter previously used MAT credit into company books following assessment reversals. It also covers bringing unrecorded tax refunds into the accounts and how to treat situations where tax assets exceed current tax liabilities, specifically if the difference can be credited to 'Other Income' in the P&L. The user notes that audited financial statements cannot be altered.

Sakshi Singhal

Sakshi Singhal (Querist)
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28 April 2020 Dear Sir,

My first query is... Like in FY 2017-18 , my company had already used MAT credit but after assessment completion in FY 2019-20 it comes to know that we still have MAT credit because of some reversals in FY 2017-18.....then how to bring that MAT credit again in books ? Please let me know the entry to be passed.
If the effect is required to be given in P&L then in which head ??

My second query is......Like for FY 2018-19 after assessment it comes to know that there is a refund which is yet to receive but it is nowhere in books...then how to bring that too in books in FY 2019-20 ? What entry is required to be passed for the same ??

Sakshi Singhal

Sakshi Singhal (Querist)
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29 April 2020 Further to the above query....In case of tax GL operation in P&L....If our Tax Asset to be brought to books of Accounts is more than Tax liability for this year can the difference be credited to Other income ??
If not then wat to do?