Question

Tax paid during the year ended 31^st March, 2023 was Rs.15,000. While calculating Net Profit before Tax and Extraordinary Items, the amount of provision for tax to be added is: (b) \[ \begin{array}{|c|c|c|} \hline \textbf{Particulars} & \textbf{1-4-2022} & \textbf{31-3-2023} \\ \hline \text{Provision for Tax} & \text{Rs.10,000} & \text{Rs.25,000} \\ \hline \end{array} \]

• A. Rs.30,000
• B. Rs.25,000
• C. Rs.10,000
• D. Rs.15,000

Hint:

Always adjust the tax provision changes with the tax paid during the year to calculate the total impact on net profit before tax.

Answer 1

The Correct Option is A

The tax provision at the start of the year was Rs.10,000, and at the end of the year, it was Rs.25,000. The total tax provision to be added is calculated as follows: \[ Rs.25,000 - Rs.10,000 + Rs.15,000 = Rs.30,000 \]