What are the various items in our ""Provision for Taxation"" line?
The ’Provision for Taxation’ line includes the following elements:
- Current Corporate Income Tax: Payable at the applicable Corporate Income Tax rate on taxable income computed for the current Financial Year in accordance with the provisions of Indian Income Tax Act as applicable to the current Financial Year.
- Wealth Tax: Payable at the applicable rate on the assessable value of taxable assets as at the close of the current Financial Year in accordance with the provisions of Wealth tax Act.
- Deferred Tax: Provision made at the prevailing Corporate Income Tax rate in accordance with the Indian Accounting Standard 22, to account for the timing differences in recognition of revenues and expenses as well as for differential treatment for certain types of revenues or expenses under The Income Tax Act, as against the treatment under The Companies Act for the current period.
- Fringe Benefit Tax: Payable at the Corporate Income Tax Rate on a certain percentage of some of the expenditure (e.g. Entertainment, Sales Promotion, Travelling Expenses etc.) deemed to have been provided to the Employees of the Company as Fringe Benefits.