Mat credit

CA Devender Chauhan (Group Financial Accountant)   (1526 Points)

29 August 2011  

A person have balance of MAT Credit of previous years, & he want to set off this credit while calculating the tax liability of AY 2011-12.

While calculating the tax weather the person first should calculate the tax liability including cess & then deduct the MAT credit


Should he first calculate the tax (excluding cess) & then adjust the MAT credit & then calculate the cess liability on balance amount.

According to me the first option should be followed but when I entered the data in Webtel software then the software followed the second option. The second optiion will reduce the cess liability of the payee & I think it is not correct.


Kindly advise..........