18 December 2012
u hv to follow these steps to calculate book profit u/s 40 (b):
1. profit as per P& L account. 2. Add back salary given to partners if debited in P&L. 3. Make adjustment for expenses allowed/disallowed as per section 28- 44D. 4. If expenses /Income of other head like house property or income from other sorcse ,capital gain has been debited /credit then reverse back the such amount from profit & loss account. 5. As the depreciation b/f is covered under section 32(2) ,so adjustment should be made for b/f depreciation to calculate the book profit but adjustment can be done only upto maximum of profit of current year before depreciation minus b/f loss of the previous years .
CAclubindia
