Schedule B

Computation of Gross Profits

[See rule 23]

Accounting year ending ..............................................................

Amount of Amount of

Item sub- Items main Items

Particulars Remarks

No.

` `

1 2 3 4 5

1. Net Profit as shown in the

Profit and Loss Account after

making usual and necessary

provisions.

Add back provision for:

2. `…………… See foot-note (1)

(a) Bonus to employees

See foot-note (1)

(b) Depreciation

(c) Development Rebate

Reserve

(d) Any other reserves

Total of Item No.2………..

1 2 3 4 5

Add back also:

3.

(a) Bonus paid to employees in

respect of previous

accounting years.

(b) 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.

(c) Donations in excess of the

amount admissible for

income-tax.

(d) Capital expenditure (other

than capital expenditure on

scientific research which is

allowed as a deduction under

See foot-note (1)

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).

(e) Any amount certified by the

Reserve Bank of India in

terms of sub-section (2) of

section 34A of the Banking

Regulation Act, 1949 (10

of1949).

(f) Losses of, or expenditure

relating to, any business

See footnote (1)

situated outside India. Total

of Item No.3………..

Add also income, profits or gains (if

4.

any ) credited directly to published

or disclosed reserves, other than-

(i) capital receipts and capital profits

(including profits on the sale of

capital assets on such

depreciation has not been

allowed for income-tax);

(ii) profits of, and receipts relating to,

any business situated outside

India;

(iii) income of foreign banking

companies from investment `……………

outside India.

Net total of Item No. 4…….

5. Total of Item Nos.1, 2, 3 and 4… `……………

1 2 3 4 5

6.

Deduct :

(a) Capital receipts and capital

profits (other than profits on the

sale of assets on which depre-

ciation has been allowed for

income-tax).

(b) Profits of, and receipts relating

See foot-note (2)

to any business situated

outside India.

(c) Income of foreign banking

companies from investments See foot-note (2)

outside India .

(d) Expenditure or losses (if any )

See foot-note (2)

debited directly to published or

disclosed 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 );

(ii) losses of any business

situated outside India.

(e) In the case of foreign banking

companies proportionate admi-

nistrative (overhead) expenses

of head office allocable to See footnote (3)

Indian business.

(f) Refund of any excess direct tax

See foot-note (2)

paid for previous accounting

years and excess provision if

any of previous accounting

years, relating to bonus, depre-

ciation or development rebate,

if written back.

(g) Cash subsidy, if any, given by the

government or by anybody corp-

orate established by any law for See foot-note (2)

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 ……

`……………

7. Gross profits for purposes of bonus `……………

(Item No. 5 minus Item No. 6)

Explanation : In sub-item (b) of Item 3, "approved gratuity fund" has the same meaning assigned to it in

clause (5) of section 2 of the Income Tax Act, 1961.

* Where the profit subject to taxation is shown in the Profit and Loss account and the

provision made for taxes on income is shown, the actual provision for taxes on income

shall be deducted from the profit.

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)].