Hello Members,
M/s XYZ Ltd. is paying tax as per the MAT provisions. While calculating MAT, interest u/s 234B and C is levied. Whether the interest on MAT u/s 234B and C is to be included in the MAT Credit. If no, then what shall be the accounting treatment for interest paid on MAT u/s 234B and C.
Please guide.
Thank you
Hi,
Interest is not available as credit. It is a cost to the company.Any interst paid is in the nature of fine or penalty. You should debit the same to P&L under your appropriate head. Some companies have separate GL for Interest whereas some company charge it to rates and taxes. It depends upon your company accounting codes.
Regards
Bharath
CAclubindia
