Calculations of net profits under section 198

To calculate the net profit under Section 198, start with your Profit Before Tax as per the audited financial statements. Add back any expenses that are not allowed under the Act (like income tax or capital losses) and deduct any income that does not qualify as "commercial profit" for this purpose (like capital gains on asset sales or premium on share issues). Finally, ensure all "usual working charges" and Schedule II depreciation have been subtracted.