COMPUTATION OF GROSS PROFITS
Accounting Year ending......
Item
No.
Particulars Amount of
sub-items
Amount of
main items
Remarks
Rs. Rs.
1. Net Profit as per Profit and Loss
Account.
2. Add back provision for:
(a) Bonus to employees.
(b) Depreciation.
(c) Direct taxes, including the
provision (if Any) for previous
accounting years.
3
[(d) development
rebate/Investment
allowance/development
allowance reserve.]
See foot-note (1)
(e) Any other reserves. See foot-note (1)
Total of Item No. 2. . . . . Rs.
3. Add back also :
(a) Bonus paid to employees in
respect of previous accounting
years.
See foot-note (1)
4
[(aa) The amount debited in
respect of gratuity paid or
payable to employees in
excess of the aggregate of—
(i) the amount, if any, paid to,
or provided for payment to,
an approved gratuity fund;
and
(ii) the amount actually paid to
employees on their
retirement or on termination
of their employment for any
reason.]
1. The First Schedule renumbered as the Second Schedule by Act 66 of 1980, s. 19 (w.e.f. 21-8-1980).
2. Subs. by s. 19, ibid., for “(See section 4)” (w.e.f. 21-8-1980).
3. Subs. by s. 19, ibid., for entry (d) (w.e.f. 21-8-1980).
4. Ins. by Act 23 of 1976, s. 26 (w.e.f. 25-9-1975).
23
Ite
m
No.
Particulars Amount of
sub-items
Amount of
main items
Remarks
Rs. Rs.
(b) Donations in excess of the among
admissible for income-tax.
(c) Any annuity due, or commuted
value of any annuity paid, under
the provisions of section 280D of
the Income-tax Act during the
accounting year.
(d) Capital expenditure (other than
capital expenditure on scientific
research which is allowed as a
deduction under any law for the
time being in force relating to
direct taxes) and capital losses
(other than losses on sale of
capital assets on which
depreciation has been allowed for
income-tax or agricultural
income-tax).
See foot-note (1)
(e) Losses of, or expenditure relating
to, any business situated outside
India.
Total of Item No. 3 . . . Rs.
4. Add also Income, profits or gains (if
any) credited directly to reserves,
other than—
(i) capital receipts and capital profits
(including profits on the sale of
capital assets on which
depreciation has not been allowed
for income-tax or agricultural
income-tax);
(ii) profits of, and receipts relating to,
any business situated outside
India;
(iii) income of foreign concerns from
investments outside India.
Net total of Item No. 4 . . . .
Rs.
5. Total of Item Nos. 1, 2, 3, and 4 . . . Rs.
24
Item
No.
Particulars Amount of
sub-items
Amount of
main items
Remarks
Rs. Rs.
6. Deduct :
(a) Capital receipts and capital
profits (other than profits on
the sale of assets on which
depreciation has been allowed
for income-tax or agricultural
income-tax).
See foot-note (2)
(b) Profits of, and receipts relating
to, any business situated
outside India.
See foot-note (2)
(c) Income of foreign concerns
from investment outside India.
See foot-note (2)
(d) Expenditure or losses (if any)
debited directly to reserves,
other than—
(i) capital expenditure and
capital losses (other than
losses on sale of capital
assets on which
depreciation has not been
allowed for income-tax or
agricultural income-tax);
(ii) losses of any business
situated outside India.
(e) In the case of foreign concerns
proportionate administrative
(overhead) expenses of Head
Office allocable to Indian
business.
See foot-note (3)
(f) Refund of any direct tax paid
for previous accounting years
and excess provision, if any, of
previous accounting years
relating to bonus, depreciation,
taxation or development rebate
or development allowance, if
written back.
See foot-note (2)
25
Item
No.
Particulars Amount of
sub-items
Amount of main
items
Remarks
Rs. Rs.
1
[(g) Cash subsidy, if any, given by
the Government or by any
body corporate established
by any law for the time being
in force or by any other
agency through budgetary
grants, whether given
directly or through any
agency for specified
purposes and the proceeds of
which are reserved for such
purposes.]
Total of Item No. 6 . . . Rs.
7. Gross Profit for purposes of bonus
(Item No. 5 minus Item No. 6)
Rs.
2
[Explanation.—In sub-item (aa) of Item 3, “approved gratuity fund” has the same meaning
assigned to it in clause (5) of section 2 of the Income-tax Act.]
Foot-notes—
(1) If, and to the extent, charged to Profit and Loss Account.
(2) If, and to the extent, credited to Profit and Loss Account.
(3) In the proportion of Indian Gross Profit (Item No. 7) to Total World Gross Profit (as per
Consolidated Profit and Loss Account, adjusted as in Item No. 2 above only).