The Code on Wages (Central) Rules, 2026

Rule Appendix C Computation of Gross Profits

Chapter: Annexures · Forms and Appendices
Text as on: As notified 08 May 2026

Appendix C COMPUTATION OF GROSS PROFITS [(See rule 25)] Accounting year ending...............

Item Particulars Amount. Of sub- Amount. Remarks No. Items Of main

Items

Rs. Rs.

(1) (2) (3) (4) (5)

1. Net profit as per profit and loss account

2. Add back provision for : See foot-

(a) Bonus to employees note (1)

(b) Depreciation. See foot-note (1)

(d) Development rebate / investment allowance / development allowance reserve.

(e) Any other reserves Total of Item No.2........

Rs..................

3. Add back also :

(a) Bonus paid to employees in respect of previous accounting See foot-years. note (1)

(aa) The amount debited in respect of gratuity paid or payable to employees in excess of the aggregate of-

(i) the amount, if any, paid to, or provided for payment to, an approved gratuity fund; and

(ii) the amount actually paid to employees on their retirement or on termination of their employment for any reason.

(b) Donations in excess of the amount admissible for income-tax .

(c) Any annuity due, or commuted value of any annuity paid, under the provisions of section 280D of the Income Tax Act during the accounting year.

(d) Capital expenditure (other than capital expenditure on scientific See foot-research which is allowed as a deduction under any law for the time note (1) being in force relating to direct taxes) and capital losses (other than losses on sale of capital assets on which depreciation has been allowed for income tax or agricultural income-tax.).

(e) Losses of , or expenditure relating to, any business situated outside India.

Total of Item No.3...........

Rs...........

4. Add also income, profits or gains (if any) credited directly

to reserves, other than-

(i) capital receipts and capital profits (including profits on the sale of capital assets on which depreciation has not been allowed for income-tax or agricultural income-tax);

(ii) profits of, and receipts relating to, any business situated outside India;

(iii) income of foreign concerns from investments outside India.

Net total of Item No.4........

5. Total of Item Nos. 1,2,3 and 4... Rs.............. Rs..............

6. Deduct : See foot-note (2)

(a) Capital receipts and capital profits (other than profits on the sale of assets on which depreciation has been allowed for income-tax or See foot-agricultural income-tax). note (2) See foot-

(b) Profits of, and receipts relating to, any business situated note (2) outside India.

(d) Expenditure or losses (if any ) debited directly to reserves, other than-

(i) capital expenditure and capital losses (other than losses on sale of capital assets on which depreciation has not been allowed for income-tax ; or agricultural income-tax;

(ii) losses of any business situated outside India.

(e) In the case of foreign concerns proportionate administrative (overhead) expenses of head office allocable to Indian business.

(g) Cash subsidy, if any, given by the government or by any body note (2) corporate established by any law for the time being in force or by any other agency through budgetary grants, whether given directly or through any agency for specified purposes and the proceeds of which are reserved for such purposes.

Total of Item No.6

7. Gross Profits for purposes of bonus (Item No.5 minus Item No.6 ) Rs...............

Explanation.-- In sub-item (aa) of Item 3, "approved gratuity fund" has the same meaning assigned to it in clause (5) of

section 2 of the Income Tax Act, 1961. Foot-note:-

(1) If, and to the extent, charged to Profit and Loss Account.

(2) If, and to the extent, credited to Profit and Loss Account. In the proportion of Indian Gross Profit (Item No. 7) to Total World Gross Profit (as per consolidated Profit and Loss Account, adjusted as in Item No. 2 above only)

Appendix C
COMPUTATION OF GROSS PROFITS
[(See rule 25)] Accounting year ending...............

Item Particulars                                                        Amount. Of sub- Amount. Remarks
No.
Items                 Of main

Items

Rs.                   Rs.

(1)                 (2)                                                        (3)                 (4)  (5)

1. Net profit as per profit and loss account

2. Add back provision for :                                                                             See foot-
(a) Bonus to employees                                                                            note (1)

(b) Depreciation.                                                                                 See foot-
note (1)
(c) Direct taxes, including the provision (if any), for
previous accounting years

(d) Development rebate / investment allowance / development
allowance reserve.

(e) Any other reserves
Total of Item No.2........

Rs..................

3. Add back also :

(a) Bonus paid to employees in respect of previous accounting                                      See foot-
years.                                                                                             note (1)

(aa) The amount debited in respect of gratuity paid or payable
to employees in excess of the aggregate of-

(i) the amount, if any, paid to, or provided for payment to,
an approved gratuity fund; and

(ii) the amount actually paid to employees on their retirement or
on termination of their employment for any reason.

(b) Donations in excess of the amount admissible for income-tax .

(c) Any annuity due, or commuted value of any annuity paid, under
the provisions of section 280D of the Income Tax Act during the
accounting year.

(d) Capital expenditure (other than capital expenditure on scientific                                              See foot-
research which is allowed as a deduction under any law for the time                                                note (1)
being in force relating to direct taxes) and capital losses (other than
losses on sale of capital assets on which depreciation has been
allowed for income tax or agricultural income-tax.).

(e) Losses of , or expenditure relating to, any business situated
outside India.

Total of Item No.3...........

Rs...........
4. Add also income, profits or gains (if any) credited directly

to
reserves, other than-

(i) capital receipts and capital profits (including profits on the sale
of capital assets on which depreciation has not been allowed for
income-tax or agricultural income-tax);

(ii) profits of, and receipts relating to, any business situated outside
India;

(iii) income of foreign concerns from investments outside India.

Net total of Item No.4........

5. Total of Item Nos. 1,2,3 and 4...                                            Rs..............
Rs..............

6. Deduct :                                                                                                      See foot-
note (2)
(a) Capital receipts and capital profits (other than profits on the sale
of assets on which depreciation has been allowed for income-tax or                                         See foot-
agricultural income-tax).                                                                                  note (2)
See foot-
(b) Profits of, and receipts relating to, any business situated                                            note (2)
outside
India.
(c) Income of foreign concerns from investment outside India.

(d) Expenditure or losses (if any ) debited directly to reserves, other
than-

(i) capital expenditure and capital losses (other than losses on sale
of capital assets on which depreciation has not been allowed for
income-tax ; or agricultural income-tax;

(ii) losses of any business situated outside India.

(e) In the case of foreign concerns proportionate
administrative (overhead) expenses of head office allocable to
Indian business.

(f) Refund of any direct tax paid for previous accounting years and  See foot-
excess provision, if any, of previous accounting years relating to   note (3)
bonus, depreciation, taxation or development rebate or
development allowance, if written back.                              See-foot-
(g) Cash subsidy, if any, given by the government or by any body     note (2)
corporate established by any law for the time being in force or by
any other agency through budgetary grants, whether given directly
or through any agency for specified purposes and the proceeds of
which are reserved for such purposes.

Total of Item No.6

7. Gross Profits for purposes of bonus (Item No.5 minus Item No.6 ) Rs...............

Explanation.-- In sub-item (aa) of Item 3, "approved gratuity fund" has the same meaning assigned to it in clause (5) of

section 2 of the Income Tax Act, 1961.
Foot-note:-
(1) If, and to the extent, charged to Profit and Loss Account.
(2) If, and to the extent, credited to Profit and Loss Account.
In the proportion of Indian Gross Profit (Item No. 7) to Total World Gross Profit (as per consolidated Profit
and Loss Account, adjusted as in Item No. 2 above only)