Taxation Laws (Amendment) Ordinance, 2019 has brought favourable amendments for corporates. However one amendment has taken the Industry to a dilemma. The dilemma is whether MAT credit entitlement available will be allowed to those opting for favourable rate under Section 115BAA.
Section 115JB(5A) has been amended to provide that provisions of Section 115JB shall not be applicable to those opting for Section 115BAA w.e.f. AY 2020-21. However it is pertinent to note that no such clause has been brought in Section 115JAA and claim of MAT credit entitlement is governed by Section 115JAA.
Section 115JAA(5) provides that set off of brought forward tax credit shall be allowed to the extent of the difference between the tax as per normal provisions and the tax which would have been payable under the provisions of sub-section (1) of Section 115JB.
View above, author is of opinion that companies having MAT Credit entitlement available needs to compute MAT payable for AY 2020-21 just to calculate the value of MAT credit entitlement to be utilized. Thus MAT credit entitlement has not been lost and will still be available even if a corporation opt for Section 115BAA.