Book profit treated as company total income where normal tax is lower, resulting in tax at the specified book profit rate. Where a company's normal income tax is less than the tax on book profit, the book profit is deemed the company's total income and taxed at the rate ... Summary
Book profit treated as company total income where normal tax is lower, resulting in tax at the specified book profit rate.
Where a company's normal income tax is less than the tax on book profit, the book profit is deemed the company's total income and taxed at the rate specified in Paragraph A of the Second Schedule; book profit is computed as A + B - (C + D) where A is net profit per the profit and loss account, B comprises specified add backs (tax provisions, reserves, depreciation, deferred tax, dividends, and related items), C comprises specified credits and adjustments (including depreciation charged and certain reserve withdrawals and credits), and D is loss brought forward subject to prescribed limitations.
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