Book profits refer to the profit earned by the business entity from its operations and activities and is calculated by deducting all the business expenses incurred within a financial year from all the sales revenue and other income generated from the selling of goods & services within that same financial year.
Herein, how is book profit calculated under section 40b?
The computation of Book Profit for the purpose of Section 40b would be the net profit as shown in the P&L A/c for the previous year and increased by the aggregate of the remuneration paid or payable to all partners of the firm is such amount has been deducted while computing the net profit.
Likewise, how do you calculate book profit for partners remuneration?
Steps to Calculation Of Book Profit for Remuneration
- Take Net Profit as per Profit and Loss / Income & Expenditure Account.
- Add back salary given to partners if debited in Profit and loss account.
- Make adjustment for expenses allowed/disallowed as per section 28- 44D.
How is remuneration calculated?
To calculate the average weekly salary, the medium workday remuneration is multiplied by the number of calendar workdays per week (in the case of full-time employment, 5). To calculate the average monthly remuneration, the medium workday remuneration is multiplied by the average number of workdays in 1 calendar month.
How is 115jb calculated?
As per Section 115JB, every taxpayer being a company is liable to pay MAT, if the Income-tax (including surcharge and cess) payable on the total income, computed as per the provisions of the Income-tax Act in respect of any year is less than 18.50% of its book-profit + surcharge (SC) + health & education cess.