hi, myself ayush agrawal i just want to know that what is the effect of mat entitlement i.e journal entry
CA AYUSH AGRAWAL (Kolkata-Pune-Mumbai) (26986 Points)
10 October 2008hi, myself ayush agrawal i just want to know that what is the effect of mat entitlement i.e journal entry
Rohit Khare
(student)
(111 Points)
Replied 11 October 2008
Hi Ayush,
MAT credit is available if u have paid tax as per MAT provisions.. As per guidence note on accounting of MAT credit, MAT credit is to be recognized in the books by passing following entry:
MAT Credit Entitlement A/c Dr.
To Profit & Loss A/c
MAT Entitlement A/c is to be shown in balancesheet under current assets. When in the coming 7 years tax is paid as per normal provisions, then MAT credit will be available and in that year this account will be credited.
sheebu
(C.a final student)
(99 Points)
Replied 11 October 2008
Sir i have a small doubt on the entry that has been posted!!!
Suppose, mat provision is 70000 and income tax provision 50000 ,mat entitlement to be carried forward would be 20000.
The year in which tax becomes payable as per mat ,shudn't the entry be
Income tax a/c dr 50000
mat entitlement dr 20000
To Income tax provision 70000
In next year subsequently the provision can be reversed too
Sir could u please clarify
CA AYUSH AGRAWAL
(Kolkata-Pune-Mumbai)
(26986 Points)
Replied 13 October 2008
Sir i have a small doubt on the entry that has been posted!!!
Suppose, mat provision is 70000 and income tax provision 50000 ,mat entitlement to be carried forward would be 20000.
The year in which tax becomes payable as per mat ,shudn't the entry be
Income tax a/c dr 50000
mat entitlement dr 20000
To Income tax provision 70000
In next year subsequently the provision can be reversed too
Sir could u please clarify
CAclubindia
