Refund of tax during the current year is.............. from the profit as given in the statement of profit and loss to find out the net profit before tax in the cash flow statement.

Deducted

The correct answer is option 2- Deducted.

A refund of tax during the current year represents a cash inflow, and since the cash flow statement aims to show the net cash inflow or outflow from various activities, a refund of tax is deducted from the profit as given in the statement of profit and loss. This deduction helps in arriving at the net profit before tax figure in the cash flow statement.

Refund of tax is added to the cash generated from operating activities.