Mat credit entitement

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piyush (Querist)
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02 July 2012 AS per the current year we have to pay MAT as our accounts profit is more then income tax profits so how we will show the effect as per the revised scehudle 6.IN THE PROFIT AND LOSS ACCOTNS AND IN THE BALANCESHEET
for example : the tax as per income tax is coming RS5 crore and as per book profit tax is coming around 15 crore ..so we have to make provison for 15 crore and coreespondigly the mat credit of rs 10 crors has to be takn . so anyone can suggest me the treatment how to shoe the effect of both as per revised schedule 6 in PROFIT AND LOSS AS WELL AS IN THE BALANCE SHEET .

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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02 July 2012 Following Entries will be passed in the books of accounts-
1.Mat Credit Entitlement(BS) Dr. 10 Crs
To Mat Credit Entitlement(PNL) 10 Crs
In Balance sheet-
MAT credit entitlement will be shown under "Long term Loans & Advances".
In Statement of profit & loss-
It will be shown under Provision for Taxation as credit item.

2. Provision for current tax(PNL)Dr. 15Crs
To Provision for Tax(A.Y12-13) 15Crs

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piyush

piyush (Querist)
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02 July 2012 Thanks AMIT but as per the balancesheet is concerend ypu r correct as i have done the same treatment but as per the proft and loss i m unable to understnd how i will do these treatment as per the revised schedule 6 . so plz clarify how it will be shown in profit and loss

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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02 July 2012 There will be one heading after net profit before tax-
Provision For Taxation-
Current tax- Rs. 15 Crs
Mat Entitlement-Rs. (10)Crs

So effectively tax will be Rs. 5 crs only.

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piyush

piyush (Querist)
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02 July 2012 THANKS AMIT .

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