Calculation of Net Profit as per Section 198

Statutory Net Profit Calculator (Sec. 198)

Compute Net Profits for determining Managerial Remuneration limits (₹ in Lakhs)

Starting Point: Profit Before Tax (as per P&L Account)

1. ADDITIONS (Credited) - Sec 198(2)

Bounties & Subsidies (received from Govt.)

2. EXCLUSIONS FROM CREDIT (Subtract) - Sec 198(3)

*Profits included in PBT but **must be excluded** from Sec 198 profit.*

Profits on Share/Debenture Premium

Profits on sale of Forfeited Shares

Profits of a Capital Nature (e.g., sale of undertaking)

Capital Profits from sale of Fixed Assets

Change in Carrying Amount (Equity Reserves/FV)

Unrealised/Notional Gains or Revaluation

3. DEDUCTIONS (Charges Allowed) - Sec 198(4)

Usual Working Charges & Staff Commission

Directors' Remuneration (Paid/Payable)

Tax on Excess/Abnormal Profits

Interest (on Debentures, Mortgages, Loans)

Expenses on Repairs (Non-Capital)

Outgoings (incl. Sec 181 Contributions)

Depreciation (as per Sec 123)

Excess Expenditure over Income (Unabsorbed Loss)

Legal Compensation/Damages & Insurance

Debts considered Bad & Written Off

4. NON-DEDUCTIONS (Add-Back) - Sec 198(5)

*Expenses deducted in PBT but **must be added back** to Sec 198 profit.*

Income-tax & Super-tax (Provision for Tax)

Voluntary Compensation/Damages

Loss of a Capital Nature (e.g., sale of undertaking)

Change in Carrying Amount (Recognized in Equity Reserves/FV)

Result:

Total Statutory Additions: ₹ 0 Lakhs

Total Statutory Deductions: ₹ 0 Lakhs

Net Profit under Section 198: ₹ 0 Lakhs