Book Profit Calculation

Book of profit is the net profit shown in the statement (P&L account) for the financial year,
calculated in accordance with the Companies Act, which is increased and decreased by the
below as follows:

Inclusions to net profit:

 If calculated, income tax paid or payable as per the normal provisions of Income Tax
Act.
 Amount shifted to any reserve.
 Amount of cost on expenses relating to exemption income u/s 10 (except u/s 10(38)).
 Dividends paid or proposed.
 Provision for losses of subsidiary (if loss).
 Provision of deferred tax.
 Provision or amount of depreciation.
 Provision of bad debts.
Exclusions to net profit:
 Amount withdrawn from any reserve
 Amount of income relating to exemption income u/s 10 (except u/s 10(38))
 Deferred amount of tax, if any
 Amount of depreciation debited to profit and loss account
 Amount of loss brought forward