Mat Credit Entitlement Set Off

In the year of set off of credit the amount of credit availed should be shown as deduction from the provision of taxation on the liabilities side of the balance sheet.

Mat credit entitlement set off. Set off shall be allowed to the extent of difference between the tax on the total income under normal provision and tax which would have been payable as per mat under section 115jb. Mat credit even though the carry forward period of credit has been allowed up to 15 years. Complexity in computing the book profit under mat provisions and recent changes in accounting standards have further increased the tax compliance burden for companies. Allowed a huge amount and in some cases where set off could.

The unavailed amount of mat credit entitlement if any should continue to be presented under the head loans advances. Suggestion on clause 46 a of finance bill 2017 section 115jaa extension of period of carry forward of mat credit from 10 years to 15 years clarity regarding carry forward and set off of mat credit in cases where the ten year period has expired on or before ay 2016 17 but the fifteen year period has still not expired. A tax credit scheme is introduced by which mat paid can be carried forward for set off against regular tax payable during the subsequent fifteen years period subject to certain conditions as under when a company pays tax under mat the tax credit earned by it shall be an amount which is the difference between the amount payable under mat and. The asset may be reflected as mat credit entitlement.

Easing the mat credit mechanism and. Moreover the mat credit set off can only be to the extent of the difference between the regular corporate tax and mat liability calculated.