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Difference between profit before taxes & profit after taxes

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Mukeshh Agarwal

E-solutions

43 Points Posted on 17 January 2012

Hi everyone !

Please ellaborate about the difference between PROFIT BEFORE TAXES & PROFIT AFTER TAXES

Say XYZ ( Construction company)

Sales / Revenue :100

Direct Cost :40

Indirect cost :30

Gross Profit : 60

Net profit : 30

(please note that Tax has been already deducted in form of TDS, hence tax liability doesnot exist)

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So, what should be my PROFIT BEFORE TAX & PROFIT AFTER TAX

Thanks in advance...

Replies (3)

Divya K S

290 Points Posted on 17 January 2012

Profit before taxes = 30

Less: Tax @ 30% = 9

Profit after taxes = 21

Even though TDS was deducted on the income received by the company, for the presentation in profit & loss account, the tax has to be disclosed as above for disclosure purposes. While computing Income Tax of the company, TDS will be deducted from the aggregate liability (i.e., Rs. 9 minus TDS will be the net liability).