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Tax credit u/s 115jaa

Pooja (Final CA) (502 Points)

07 August 2013

If my total tax liability comes to Rs. 10300 (Tax 10000 + cess 300),
then will I get tax credit of Rs. 10300 or Rs. 10000?
If I get tax credit of Rs. 10000, then do I need to pay the amount of Cess i.e Rs. 300?

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5 Replies

Manikanth (Chartered Accountant) (342 Points)
Replied 07 August 2013

If you have sufficient MAT Credit, then u can setoff it against the aggregate amount of Tax payable during the year plus Edu. cess.

CA Aman Gupta (Chartered Accountant) (344 Points)
Replied 07 August 2013

Your query is not clear. Can you please mention the tax liability in normal and MAT separately and further please mention your MAT credit available for Set off.

Pooja (Final CA) (502 Points)
Replied 07 August 2013

The Normal tax liability on total income = Rs. 10000

Cess on above = Rs. 300

therefore, Total tax liability = Rs. 10300

Tax liability under MAT = NIL

MAT credit available = Rs. 100000

My question is,

whether we get credit u/s 115 JAA on Rs. 10000, before calculating cess; in which case the tax liability will be nil and thus no cess will be calculated.

whether we get MAT credit after calculating cess, in which case Rs. 10000 will be deducted from Rs. 10300 and Rs. 300 would be the amount payable by us since MAT credit is not allowed on cess?