InvestorQ : In the Profit and loss statesment of any company always tax is deducted from PBT and then we get the PAT but sometimes tax is added in PBT and then the PAT becomes more than PBT please tell me what is the negative tax in that case
Lala Prasad Rout made post

In the Profit and loss statesment of any company always tax is deducted from PBT and then we get the PAT but sometimes tax is added in PBT and then the PAT becomes more than PBT please tell me what is the negative tax in that case

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Archita Jajjoo answered.
1 year ago
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Tax liability is always deducted from the PBT to arrive at the PAT. However, there are occasions when there is a tax credit available to the company due to specified investments which could result in a net tax credit instead of a tax payout. This can be instrumental in having the tax credit added back to the PBT.

The other occasion is when there are deferred taxes paid in the past due to MAT and the actual liability may actually be lower. In such cases also, the credit of tax will be added back to the PBT and the PAT will be higher than the PBT.

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