When entries for MAT credit has to be made in accounts

 Dear Pushpa kumar, Mat is first a liability for tax and also a credit receivable. But both has to be reflected in the balance as at the last day of the financial year. So while finalising the accounts after the balance sheet date, following entry is to be passed -

1) MAT credit receivable A/c  Dr      xxxxx

          To Provision for MAT                             xxxxx

(for making provision as at balance sheet date)

2) Provision for MAT A/c   Dr    xxxxx

           To Bank A/C                                xxxxx

(At the time of Payment of MAT)

I would like to add some more points with Sathish's.  Instead of naming the credit entry as Provision for MAT, please name it as MAT Credit Adjustment and show it below the line (after Net Profit after Depreciation).  As regard to disclosure in the Balance Sheet, you can show it next to the head Investments, like Deferred Tax Asset A/c.  It is better you have a Schedule of this account showing break-up of each assessment years', as you can avail the credit with in next 10 assessment years only.