Sairam Ltd., engages in diversified activities, earned a profit of ₹14,50,000 after debit/credit of the following items to its statement of profit and loss account for the year ended on 31.3.2025: Items debited to Statem

Answer 5(ii) Computation of Book Profit u/s 115JB Particulars ₹ ₹ Profit as per statement of profit & loss account 14,50,000 Add: net profit to be increased by the following amounts as per explanation 1 to section 115JB 5,20,000 Provision for loss of subsidiary 60,000 Provision for Income Tax 1,10,000 Depreciation debited to profit and loss account 3,50,000 19,70,000 Less: Net profit to be reduced by the following amounts as per explanation 1 to section 115JB Depreciation debited to profit and loss account (excluding depreciation on account of revaluation of fixed assets) (i.e., ₹3,50,000-1,50,000) 2,00,000 Brought forward business loss or unabsorbed depreciation as per books of account, whichever is less, taken on cumulative basis 6,00,000 (8,00,000) Book Profit 11,70,000 In case of a company, it has been provided that where income-tax payable on total income computed as per the provisions of the Act is less than 15% of book profit, the book profit shall be deemed as the total income and the tax payable on such total income shall be 15% thereof plus HEC @ 4%. Accordingly, in this case, since income tax payable on total income computed as per the provisions of the Act is less than 15% of book profit, the book profit of ₹11,70,000 is deemed to be the total income and income tax is payable @ 15% thereof plus HEC@4%. The tax liability, therefore, works out to be ₹1,82,520 Section 115JAA provides that where tax is paid in any assessment year in relation to the deemed