MAT Credit Setoff

MAT Credit Setoff

MAT Credit Setoff 
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.

We understand this from the example given below





Total Income is Rs. 150000 
Total Tax (Normal Provision) - Rs. 46800
MAT Tax - Rs. 15600 So, here, Op MAT can be set-off by Rs. 31200 (Rs. 46800 - Rs. 15600) only, and balance Rs. 68800 will be carried forward. 
Tax under Normal Provision will be than Rs. 46800 - Rs. 31200 = Rs. 4906
Cess will be added, Advance Tax TDS will be deducted and Interest u/s 234A/B/C will be added, if applied.


Hope this Helps


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