Net profit

Tax Glossary Definition

Net profit

Net Business Income = Business Revenue – Deductible Expenses ± Tax Adjustments

It represents the actual profit on which a business is taxed and indicates the financial performance of the business after all allowable deductions.

Example:

A business earns ₹12,00,000 in revenue and has ₹8,00,000 in deductible expenses. After accounting for tax adjustments of ₹50,000, the net business income is:

₹12,00,000 – ₹8,00,000 – ₹50,000 = ₹3,50,000.

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