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?

₹23,000

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.