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Quesry on mat

CA Atihash Agarwal (CHARTERED ACCOUNTANT) (187 Points)

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???

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6 Replies

Yajendra Adhikari (Chartered Accountant) (334 Points)
Replied 28 July 2012

30% of 3 Lacs = 90000.

Less TDS = 30000

Remaining Tax Payable = Rs. 60000

MAT Credit can be taken for Rs 60000. Provided that much MAT credit is available with you.

CA Vikas Kumar Sharma (CA) (494 Points)
Replied 28 July 2012

For A.Y. 11-12 , MAT Credit = MAT- Normal Tax = 100000- Nil = 100000/- Now next year you can avail mat credit up to the difference of Normal Tax - MAT .

CA Atihash Agarwal (CHARTERED ACCOUNTANT) (187 Points)
Replied 28 July 2012

I paid tax of Rs 1lac as MAT of last year.

and in this year, my liability would come as 90000/-

In that way, i should be getting full credit of Rs 90000/- and then 10000/- should be mat credit of next year.

Ultimately, 30000/- would be refunded back.

Is that the final conclusion??

CA Vikas Kumar Sharma (CA) (494 Points)
Replied 30 July 2012

Dear Harsh, Unable to understand ur qu.

In next year calculate ur normal tax and mat.

Mat credit available in next year maximum of Normal tax less mat.

i. e. in next year you have to pay MAT if mat credit available.

Suppose u r normal tax is Rs. 90,000/-

and MAT is Rs. 50,000/-

So you can avail MAT credit only Rs. 40,000/- and you have to pay tax Rs. 50,000/-

CA Atihash Agarwal (CHARTERED ACCOUNTANT) (187 Points)
Replied 30 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

CA Vikas Kumar Sharma (CA) (494 Points)
Replied 30 July 2012

Your Current year tax is 80,000/- What abount current year MAT tax = ? Suppose current year MAT is NIL, then u r answer is right . Otherwise you can avail MAT Credit only excess of normal tax = 80000 - MAT tax