Notional profit

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ankur singhal

ankur singhal (Querist)
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29 October 2013 What is the difference between notional profit and estimated profit?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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29 October 2013 estimated profit is in regards to a transaction wherein there is some profit but the quantum of the same is not accurately determinable. this could happen on account of absence of complete information, improper documentation etc.

However, notional profit is where there is profit as such but some amount is attributed as profit. Eg. Addition of notional on Interest free advance in income tax.

Often notional profit is used for financial analysis purposes to arrive at true performance of a particular project.

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