banner_ad

Pre and post tax Dis rate

CA Final 1447 views 1 replies

 

Dear Frenz,

I ve a doubt regarding Pre tax Discount rate & post tax discount rate.

Suppose my yearly lease rental is 10000(Pre tax).Discount rate 10%( pre tax).the present value for payment of lease rental at the end of year 1 is 10000/1.1=9090.91

Now lets assume tax rate to be 30%.so my post tax lease rental after considering tax saving 3000 is 7000.

Also my post tax discount rate 7% ie 10%*(1-.3).So my present value after tax for lease rental paid after one year is 7000/1.07=6542.

Can some one explain me ?is there in fault in my concept.why aint both figures same....wats my mistake?

Replies (1)

Hi Girish, it is not ur fault bro. When the pre tax discount rate is used, u may get a different amount. It is the problem with the formula  POST TAX RATE=PRE TAX RATE(1-t). Searched on the net regd this & got this document. Pls have a look.  


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
19 May 2026
Accountant

ca kunjan

Mumbai

CA Inter

View Details
Company
Featured 26 May 2026
Account Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
ARTICLESHIP 09 June 2026
Article Trainee

Numbertree LLP

Mumbai

CA Inter

View Details
Company
ARTICLESHIP 27 May 2026
CA Article Trainee

Rahul Dang & Associates-Chartered Accountants

Pune

CA Inter

View Details
Company
ARTICLESHIP 15 May 2026
Audit Assistant / Article Trainee / Intern

SSGS and Associates

Chennai

CA Inter

View Details
Company
26 May 2026
Audit executive

vdsr & co LLP

Chennai

CA Inter

View Details
Company
ARTICLESHIP 28 May 2026
Accounts, Audit & Compliance Executive

Shyam Joshi & Associates

Pune

B.Com

View Details
Company
04 June 2026
Semi Qualified CA

Goyal Puneet & Associates

New Delhi

CA Final

View Details