Mat Credit Entitlement For How Many Years

Year but by taking the advantage of various provisions of income tax law like exemptions deductions depreciation etc it may have reduced its tax liability or may not have paid any tax at all.

Mat credit entitlement for how many years.

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. Currently tax credit can be carried forward up to the 10th. The unavailed amount of mat credit entitlement if any should continue to be presented under the head loans advances. Unabsorbed mat credit will be allowed to be accumulated subject to the 10 years carry forward limit.

Providing relief to assessees paying minimum alternate tax mat finance minister arun jaitley proposed to enhance the time limit to claim mat credit from the existing 10 years to 15 years. In case of conversion of the company into a limited. The mat credit and carry forward provisions indicate that it was always the intention that mat should not be a final tax on a company. I propose to introduce a minimum alternate tax mat on companies.

And now since 2018 to 15 years. 4 relevant extract of the budget speech 1996 97. This is with effect from ay 2018 19 prior to which mat could be carried forward only for a period of 10 ays. In the assessment year when regular tax becomes payable the difference between the regular tax and the tax computed under mat for that year will be set off against the mat credit available.

Such excess of tax credit is allowed to be carried forward and set off in the financial year in which the company is liable to pay tax under the general provisions of the income tax act. Rs 14 43 000 rs 12 48 000 rs 1 95 000. The asset may be reflected as mat credit entitlement. This mat credit can be carried forward and set off for 10 consecutive assessment years succeeding the year in which the tax credit first accrued.

Such tax credit shall be carried forward for 15 assessment years immediately succeeding the assessment year in which such credit has become allowable. Due to increase in the number of zero tax paying companies mat was introduced by the finance act 1987 with effect from assessment year 1988 89. 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.