LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

Mat & advance tax

L KANAGARAJ (Assistant Manager-Finance) (615 Points)

13 December 2011

Pl. anyone differenciate MAT and advance tax.

Reply
Follow
Share

17 Replies

CA Hemang Shah (PRACTICE) (658 Points)
Replied 13 December 2011

Mat book profit pe lagta he jab ki advance tax to net total iincome pe lagta he. Book profit cant be estimated but net income can be estimated to pay advance tax.

Vineet Kumar Sharma (Chartered Accountant) (316 Points)
Replied 13 December 2011

MAT - It is a tax which is payable by only a Company, either domestic or foriegn, if the amount of Tax computed as per the normal provisions is lower than 18% of Book Profit (Sec.115JB). This is the mode for computing the Taxaable Income & Tax thereon in any assessment year.

Advance Tax - It is the mode of payment of Tax. Everyone (either Individual or HUF, Company or Trust), if there Tax payment Liability exceeds Rs.10,000/- is require to estimate there tax liability in advance in Previous year itself and pay the Tax in that year.

1 Like

Vineet Kumar Sharma (Chartered Accountant) (316 Points)
Replied 13 December 2011

MAT - It is a tax which is payable by only a Company, either domestic or foriegn, if the amount of Tax computed as per the normal provisions is lower than 18% of Book Profit (Sec.115JB). This is the mode for computing the Taxaable Income & Tax thereon in any assessment year.

Advance Tax - It is the mode of payment of Tax. Everyone (either Individual or HUF, Company or Trust), if there Tax payment Liability exceeds Rs.10,000/- is require to estimate there tax liability in advance in Previous year itself and pay the Tax in that year.

Brajesh gautam (student) (232 Points)
Replied 15 December 2011

P l tell me , is salaried person required to pay advance tax , if tax liabilty is more than 10000. more eover , in case of company regarding advance tax ,

how to deduct advance tax suppose from April to June , profit is 10 lacs, July to sep 20 lacs , oct ot Dec 15 lacs , Jan to march 25 lacs ,

Pl compute the advance tax since first installment of advnace tax is deposited on or before 15 june then does we require the profit from april to 15 june , Pl give explanation or if is there any excel sheet , pl send

Vineet Kumar Sharma (Chartered Accountant) (316 Points)
Replied 19 December 2011

1. Yes, A salaried person is require to deposit the advance tax if his advance tax liability exceeds 10,000/- (as per Section 208)

Advance Tax Liability= Tax computed on the Estimated Gross Total Income-TDS-Relief u/s 89/90/90A/91-MAT Credit.

Every Assessee is require to estimate its income for previous year in such p/y itself.

Total Income of Your Co. be 70Lacs (i.e. 10+20+15+25). Hence, Co. shall require to submit Rs.3.24Lacs by 15th June.

Attached File : 264899 889707 advance tax.xlsx downloaded: 148 times

Brajesh gautam (student) (232 Points)
Replied 19 December 2011

THANKS VINEET ,

PL BE NOTED - FOR A/Y 2012-13 MAT RATE IS 18.5%

Brajesh gautam (student) (232 Points)
Replied 19 December 2011

dear Vineet ,

there is still confusion, Pl help me

If tax liability exceeds 10000, then should TDS on salary not be deducted or we should do both simultaneously.

Brajesh gautam (student) (232 Points)
Replied 19 December 2011

dear Vineet ,

there is still confusion, Pl help me

If tax liability exceeds 10000, then should TDS on salary not be deducted or we should do both simultaneously.

Vineet Kumar Sharma (Chartered Accountant) (316 Points)
Replied 19 December 2011

1. As per Section 192, every employer is require to deduct TDS on salary payable by him.

However, if TDS is not deducted by the employer, then, Assessee shall himself pay the Tax. (Section-191)

Lets take examples:-

a. Total Tax of Assessee-Rs.12,000 and whole TDS has been deducted. then, No Advance Tax is Payable.

b. Total Tax of Assessee-Rs.12,000 and no TDS has been deducted. Then, Advance Tax is Payable-12,000.

c.Total Tax of Assessee-Rs.12,000 and TDS has been deducted-3,000. then, No Advance Tax is Payable.

The Law provides that if the Adance Tax Liability as computed by the earlier formula exceeds Rs.10,000/-, then he is require to pay Advance Tax otherwise not.

Vineet Kumar Sharma (Chartered Accountant) (316 Points)
Replied 19 December 2011

Section 191 & 192 go simultaneously. If employer deduct TDS, then no Advance Tax. If Employer did not deduct TDS, then Advance Tax is payable.

Brajesh gautam (student) (232 Points)
Replied 20 December 2011

Dear Vineet

Pl clarify

in attached sheet above since we dont know in begining of year that our profit would be 70 lacs. in the first qtr our profit is 10 lacs but as per computation advance tax comes 3.24 when we compute the tax on 21.63. But in first QTR we should compute the tax on 10 lacs only. and tax is computed on 10 lacs , figure will change Pl give clarification for each qtr like wise , Pl it is urgent

Vineet Kumar Sharma (Chartered Accountant) (316 Points)
Replied 21 December 2011

Advance Tax is payable on Estimated Income of an Assessee.

The question as regard to income is not computable in the beginning of the year is redundant. Because, every assessee has a knowledge about of his total income of Business, to be shown by him in his return and the Govt also know this fact.

The framework of the Advance Tax provision is done after keeping the above view.

For eg: I know the Income of my business for the A/Y-12 13 be 20Lacs. I will pay advance tax accordingly. If my income exceeds, then I am require to pay interest. There is no penalty for less deposit of Tax.

While taking a loan or o/d limit, You estimates your future income & profitability. Same estimation is require to be made in comp. of Advance Tax.

You are not require to pay advance tax on Actual Income. All the adjustment is done in Assessment Year while furnishing a return of Income.

Tanash Chakraborty (KPMG) (292 Points)
Replied 05 February 2012

hey io have a doubt...MAT is calculated on the book profits of the company or the total income of the ocmpany on whose basis we calculate the tax payable...is it the amt on profits and gains from business and profession or the net income of the company assessee..????

and what are the provisions of mat with regard to LLP?

Rajesh Gupta (accountant) (47 Points)
Replied 07 March 2012

My query is let recruitment services received on 15th jan 2012 & recruitment agency fees payable only after three month i;e 15th april 2012 then what entry to be passed.

whether entry should be passed in March 2012 or it can be taken in April 2012.

Thanks

Recent Topics

More recent discussions | Post

Related Threads

Popular Discussion

Start a New Discussion

Trending Online Classes

Live class on Bonus & Gratuity(with recording)

Mr.Balamurugan Ranganathan

Enroll Now

25 April 2024
GST Live Certification Course (39th Batch) - April 2024 (Weekend Batch) (With Certificate)

CA Arun Chhajer

Enroll Now

21 April 2024
"Live class on Python for Financial Analysis: Unlocking Efficiency in Accounting and Finance"

CA Vishal Zawar

Enroll Now

01 May 2024

view all classess

Subscribe to the latest topics :

Search Forum:

Forum Home

Popular Threads

Mat & advance tax

17 Replies

Online classes for CA CS CMA. Professional courses for GST, Tally, Others & Books

MAT - It is a tax which is payable by only a Company, either domestic or foriegn, if the amount of Tax computed as per the normal provisions is lower than 18% of Book Profit (Sec.115JB). This is the mode for computing the Taxaable Income & Tax thereon in any assessment year.

Advance Tax - It is the mode of payment of Tax. Everyone (either Individual or HUF, Company or Trust), if there Tax payment Liability exceeds Rs.10,000/- is require to estimate there tax liability in advance in Previous year itself and pay the Tax in that year.

MAT - It is a tax which is payable by only a Company, either domestic or foriegn, if the amount of Tax computed as per the normal provisions is lower than 18% of Book Profit (Sec.115JB). This is the mode for computing the Taxaable Income & Tax thereon in any assessment year.

Advance Tax - It is the mode of payment of Tax. Everyone (either Individual or HUF, Company or Trust), if there Tax payment Liability exceeds Rs.10,000/- is require to estimate there tax liability in advance in Previous year itself and pay the Tax in that year.

1. Yes, A salaried person is require to deposit the advance tax if his advance tax liability exceeds 10,000/- (as per Section 208)

Advance Tax Liability= Tax computed on the Estimated Gross Total Income-TDS-Relief u/s 89/90/90A/91-MAT Credit.

Every Assessee is require to estimate its income for previous year in such p/y itself.

Total Income of Your Co. be 70Lacs (i.e. 10+20+15+25). Hence, Co. shall require to submit Rs.3.24Lacs by 15th June.

1. As per Section 192, every employer is require to deduct TDS on salary payable by him.

However, if TDS is not deducted by the employer, then, Assessee shall himself pay the Tax. (Section-191)

Lets take examples:-

a. Total Tax of Assessee-Rs.12,000 and whole TDS has been deducted. then, No Advance Tax is Payable.

b. Total Tax of Assessee-Rs.12,000 and no TDS has been deducted. Then, Advance Tax is Payable-12,000.

c.Total Tax of Assessee-Rs.12,000 and TDS has been deducted-3,000. then, No Advance Tax is Payable.

The Law provides that if the Adance Tax Liability as computed by the earlier formula exceeds Rs.10,000/-, then he is require to pay Advance Tax otherwise not.

Section 191 & 192 go simultaneously. If employer deduct TDS, then no Advance Tax. If Employer did not deduct TDS, then Advance Tax is payable.

Advance Tax is payable on Estimated Income of an Assessee.

The question as regard to income is not computable in the beginning of the year is redundant. Because, every assessee has a knowledge about of his total income of Business, to be shown by him in his return and the Govt also know this fact.

The framework of the Advance Tax provision is done after keeping the above view.

For eg: I know the Income of my business for the A/Y-12 13 be 20Lacs. I will pay advance tax accordingly. If my income exceeds, then I am require to pay interest. There is no penalty for less deposit of Tax.

While taking a loan or o/d limit, You estimates your future income & profitability. Same estimation is require to be made in comp. of Advance Tax.

You are not require to pay advance tax on Actual Income. All the adjustment is done in Assessment Year while furnishing a return of Income.

Leave a reply

Recent Topics

Related Threads

Popular Discussion

Trending Online Classes

Subscribe to the latest topics :

Search Forum: