Tax computation

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 June 2010 Our company followed Accrual system of accounting so at the time of computing business income if there is any outstanding expenses,advance income,prepaid expenses,accurued income etc income, expenses are written back in profit & loss a/c when computing taxable profit or it should be taken as usually in pr & loss a/c.

kantijain

kantijain (Expert)
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03 June 2010 Dear friend,

the tax computation for co has to be on the basis of method of accounting regularly followed i.e mercantile system (As per cos act they are statutorily bound to follow mercantile system). therefor whatever is net profit will be the starting point for ur tax computation in normal scenario also and in Minimum alternative tax (MAT u/s 115JB) secnario also.