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

    • Related Articles

    • ZenIT || Calculation of Minimum Alternative Tax (MAT)

      What is MAT: As companies avoided taxes using all possible rebates, the MAT was introduced. MAT is a provision in the IT Act to limit the exemptions and rebates availed by companies. With MAT, companies have to necessarily pay a minimum amount of tax ...
    • MAT Rate & its Applicablity

      What to Do If MAT applicable rate is 9%? MAT stands for Minimum Alternate Tax and AMT stands for Alternate Minimum Tax. Initially the concept of MAT was introduced for companies and progressively it has been made applicable to all other taxpayers in ...
    • ITR Upload error - TDS credit claimed is more then tax dedcuted

      ITR Upload error - TDS credit claimed is more then tax dedcuted  Possible Solution -  This error occurs when TDS amount claimed is more than TDS deducted amount. Go to Transaction> Tax detail > TDS Detail  Hope this Helps 
    • Income Tax || Demand Status

      The Income Tax Department (IT Department) thoroughly reviews income declarations and tax payments to ensure their accuracy. Only once it confirms the alignment of these details will the IT Department accept the tax return filed under Section 143(1). ...
    • Income Tax || Custom Backup

      To take backup of any particular clients please open the spectrum module like Income Tax, TDS and then go to its Tools Menu >> Database Utility >> Custom backup. Now, Select the check box in front of the client for whom you wish to take backup then ...