MAT CALCULATION-URGENT

This query is : Resolved

Rajesh Goyal (Querist)
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09 September 2010 A PVT. LTD. COMPANY HAS TAX AS PER NORMAL PROVISION OF Rs. 145000/- AND AS PER MAT Rs. 75000/-.

WHAT WILL BE JOURNAL FOR THIS & WHAT WILL BE THE AMOUNT TRANSFERRED TO P & L ACCOUNT AND BALANCE SHEET.

ALSO WHAT WILL BE THE CURRENT YEAR'S PFT.

REGDS,

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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10 September 2010 in this case the normal tax of Rs. 145000/- will apply as it is higher than MAT.

So the PFT will be Rs. 145000/-

Entry : P/L Account Dr. 145000/-

To PFT Cr. 145000/-

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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10 September 2010 See the provision is very clear :

"Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee, being a company, the income-tax, payable on the total income as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after 84a[the 1st day of April, 85[86[2010]]], is less than 86a[87[88[fifteen per cent]]] of its book profit, 89[such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income-tax at the rate of 86a[87[88[fifteen per cent]]].]"

So when the normal Tax is lesser than Tax under section 115JB, then only this MAT applies.

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