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[THE SECOND SCHEDULE]

[See section 4(b)]

Computation of Gross Profits

Accounting Year ending.............................

Item No.	Particulars	Amount of sub-items		Amount of main items	Remarks
			Rs.	Rs.
1.	Net Profit as per Profit and Loss Account.
2.	Add back provision for:
	(a) Bonus to employees.
	(b) Depreciation.
	(c) Direct taxes, including the provision (if any) for previous accounting years.
	⁵⁵[(d) Development rebate/ Investment allowance /Development allowance reserve.]				See footnote (1)
	(e) Any other reserves.				See footnote (1)
	Total of Item No. 2	Rs.
3.	Add back also:
	(a) Bonus paid to employees in respect of previous accounting years.				See footnote (1)
	⁵⁶ [(aa) The amount debited in respect of gratuity paid or payable to employees in excess of the aggregate of—
	(i) the amount, if any, paid to, or provided for payment to, an approved gratuity fund; and
	(ii) the amount actually paid to employees on their retirement or on termination of their employment for any reason.]
	(b) Donations in excess of the amount admissible for income-tax.
	(c) Any annuity due, or commuted value of any annuity paid, under the provisions of section 280D of the Income-tax Act during the accounting year.
	(d) Capital expenditure (other than capital expenditure on scientific research which is allowed as a deduction under any law for the time being in force relating to direct taxes) and capital losses (other than lossess on sale of capital assets on which depreciation has been allowed for income tax or agricultural income-tax).				See footnote (1)
	(e) Losses of, or expenditure relating to, any business situated outside India
	Total of Item No. 3	Rs.
4.	Add also Income, profits or gains (if any) credited directly to reserves, other than—
	(i) capital receipts and capital profits (including profits on the sale of capital assets on which depreciation has not been allowed for income-tax or agricultural income-tax);
	(ii) profits of, and receipts relating to, any business situated outside India;
	(iii) income of foreign concerns from investments outside India.
	Net total of Item No. 4	Rs.
	Total of Item Nos. 1, 2, 3 and 4.			Rs.
6.	Deduct—
	(a) Capital receipts and capital profits (other than profits on the sale of assets on which depreciation has been allowed for income-tax or agricultural income-tax).				See footnote (2)
	(b) Profits of, and receipts relating to, any business situated outside India.				See footnote (2)
	(c) Income of foreign concerns from investments outside India.				See footnote (2)
	(d) Expenditure or losses (if any) debited directly to reserves other than—
	(i) capital expenditure and capital losses (other than losses on sale of capital assets on which depreciation has not been allowed for income-tax or agricultural income-tax);
	(ii) losses of any business situated outside India.
	(e) In the case of foreign concerns proportionate administrative (overhead) expenses of Head Office allocable to Indian business.				See footnote (3)
	(f) Refund of any direct tax paid for previous accounting years and excess provision, if any, of previous accounting years relating to bonus, depreciation, taxation or development rebate or development allowance, if written back.				See footnote (3)
	⁵⁷ [(g) Cash subsidy, if any, given by the Government or by any body corporate established by any law for the time being in force or by any other agency through budgetary grants, whether given directly or through any agency for specified purposes and the proceeds of which are reserved for such purposes.]
	Total of Item No. 6	Rs.		Rs.
7.	Gross profits for purposes of bonus (Item No. 5 minus Item No. 6)
	⁵⁸ [Explanation: In sub-item (oa) of item 3, "approved gratuity fund" has the same meaning assigned to it in clause (5) of section 2 of the Income-tax Act.

Footnotes :

(1) If, and to the extent, charged to Profit and Loss Account.

(2) If, and to the extent, credited to Profit and Loss Account.

(3) In the proportion of Indian Gross Profit (item No. 7) to Total World Gross Profit (as per Consolidated Profit and Loss Account, adjusted as in item No. 2 above only).

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GST India Solution is an effort of firm of professionals who welcome implementation of GST. This is an interactiveplatformthat aspires to disseminate right knowledge to professionals, practitioners and public at large. This platform has beenfloatedbya firm of Chartered Accountants relentlessly working in field of direct and indirect taxes since early 1985.

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