Learner
4016 Points
Joined December 2009
Dear Gowri,
GTI is invariably different from the net profit reported in the Profit & Loss A/c...
Reasons-
1) Different rates of Depreciation under Companies Act & Income Tax Act..
2) There may be many expenses which have been debited to P/L A/c but are dissallowed under Income Tax Act & therefore have to be added back to the figure of net profit...Like "Charity/Donation, Provisions for expenses, Provision/Payment of Income Tax/Wealth Tax, etc
3) Likewise there can be Incomes credited to P/L A/c which are exempt from Tax like Dividends...