A company has the balance of Provision for taxation ₹20,000 and ₹25,000 on 31 march 2021 and on 31 march 2022 respectively. Income tax paid during the year 2021-22 was ₹18,000. How much amount would be added while calculating Net profit before tax and extraordinary items?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- ₹23,000.
Provision for taxation = Closing balance + paid up tax- opening balance
= 25,000 + 18,000 - 20,000
= ₹23,000
₹23,000 would be added while calculating Net profit before tax and extraordinary items.