MAT CREDIT & DEFERRED TAX

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jignesh (Querist)
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11 April 2008 hello sir,
what is a diffrence between defered asset & defered liability?
how it is being calculated?
What is MAT ?
When it comes?

please reply me as earlier as possible

CA Shailesh +91 9393926464

CA Shailesh +91 9393926464 (Expert)
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11 April 2008 1) When ur income is more as per income tax act than the income as per companies act, Deferred Tax Asset arises.

2) When ur income is less as per income tax act than the income as per companies act, Deferred Tax Liability arises.

3) For provisions of MAT, refer sec,115JB of The IT Act,1961.

CA Jonu Jain

CA Jonu Jain (Expert)
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12 April 2008 One thing is to be remember that DTA & DTL is created for the temprorarily difference eg normally dep rate in the income tax act is more than the companies act then it means today we r taking more benefit in the income tax act which is subject to reversal then the concepet of deferred tax will come into picture just to compy with the matching concept.
DTL- if benefit in income tax has taken mor ethan the book of account then DTL is recognized
DTA- in the reverse case bt subject to having certantity of recovery the DTA
MAT is minimum alternatre tax and required to be paid by a company if tax payable as per normal provision is less than the tax computed @ 11.33% of book profit. this is not an actual tax liability and even the excess tax than normal tax is allowed to be carried forward in future years.
hope this would be sufficent since it is a very large concept which need the lengthy bexplanation which is not possible to explain in the msg

CA Jonu Jain

CA Jonu Jain (Expert)
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