Calculation of Net profit as per Section 198

This discussion explores the treatment of notional gains, specifically those arising from changes in estimates for financial liabilities like Optionally Convertible Debentures (OCDs), when calculating net profit under Section 198. The core question is whether these notional gains, booked under 'Other Income', should be included in the net profit calculation as per Section 198(3)(e), which excludes unrealised or notional gains. The conversation also touches upon the nature of OCDs as convertible debt and potential deferred tax implications.