How to Calculation Provision for Income Tax?

The provision of current tax is based on the taxable income for the year determined in accordance with the prevailing law for taxation of income. The charge for current tax is calculated using prevailing tax rates or tax rates expected to apply to the profit for the year if enacted.

The charge for current tax also includes adjustments to the provision for tax relating to prior periods as a result of tax assessments finalized during the year.

Current tax

Calculation of current tax is based on taxable income which is derived from accounting profit by making adjustments as prescribed by local tax laws. Typically the adjustment would include differential of accounting and tax depreciation

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