General reserve

The profit after tax is transferred to general reserve.
 

Usually Reserve calucated & Transfered to capital  after computation of income tax..

Thank you

Thank you all....

Sir, transfer to G.R. is an appropriation of profit [i.e. below the line item which appears in P & L (Appropriation) A/c] & should always be 'after tax', i.e., after making provision for income tax [i.e., above the line item which appears in P & L A/c] during the F.Y. But as far as the taxability is concerned, transfer to G.R. is taxable as its not an expenditure which can be said as charge against profit but only an appropriation of profit.

Hope your doubt is clear now.

Of course transfer to GR is after tax. Had it been before tax, the business houses could use the practice by transferring a large part of earning in GR and paying a negligible amount to the Govt. as Income Tax or even avoid paying the tax. So, in commonsence and also in accounting, taxation angle it is after tax