Mat credit query

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CA Atihash Agarwal (Querist)
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28 July 2012 A company paid MAT against income of Rs 5 Lacs in A/Y 11-12 . The MAT was around Rs 100000/- with interest.

The income was u/s 10(38) i.e sale of LT Shares which is exempt but comes under computation of MAT.

Now the Current Year Income is Rs 3 Lacs. The TDS of Current Year is Rs 30000/-

The question is that how much MAT Credit can be obtained in this year and what is the tax treatment???

CA Mukesh Heda

CA Mukesh Heda (Expert)
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28 July 2012
In current year, first calculate if
company is coming under MAT liability or normal tax liability. Say if company is under MAT, than company has to pay that much tax. secondly, if company is under normal tax liability - in that scenario, company need to pay to that extent of MAT liability and above that tax liability can be set off against MAT paid under earlier year. I hope you got the answer. for the purpose of payment, TDS deducted wd be adjusted against payment liability.

CA Atihash Agarwal

CA Atihash Agarwal (Querist)
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28 July 2012 Sir,
In this year the company is under normal tax provisions.

Suppose MAT Credit is Rs 300000/-.
Current Year Income is Rs 250000/-
Tax due is Rs 80000/- and TDS is Rs 50000/-

Now, TAX DUE = 80000/-
- MAT CREDIT = 80000/-
NET LIABILITY= NIL

HENCE REFUND DUE= 50000/-
AND MAT CREDIT C/o = 220000/-

AM I CORRECT?? OR THERE IS SOME OTHER TREATMENT