Profit After Tax: Significance, Advantages, Profit After Tax Formula & Calculation

Switch to Digit Insurance

Trusted by 2 crore Indians

1 Year Waiting Period

Health
Car
Third-party premium has changed from 1st June. Renew now

Bike
Commercial
COVID-19 covered

Travel
More

Registration Number

Car Owner Name

Mobile Number

+91

Enter Mobile Number to Proceed

+91

ENTER YOUR CAR NUMBER

DON'T KNOW YOUR CAR NUMBER?

renew digit policy

I agree to the Terms & Conditions

Registration Number

Vehicle Owner Name

Previous Policy Expiry

Not Expired

Expired

DON'T KNOW REGISTRATION NUMBER?

I KNOW MY REGISTRATION NUMBER

IT'S A NEW BIKE

RENEW DIGIT POLICY

I agree to the Terms & Conditions

Registration Number

IT'S A NEW BIKE

RENEW DIGIT POLICY

I agree to the Terms & Conditions

Which countries are you visiting?

Most Popular(You can select more than one)

Leaving date

Return date

I agree to the Terms & Conditions

As mandated by Spanish Authorities your travel insurance needs to extend 15 days after your trip ends.
We will extend your coverage period accordingly.

Pin Code

In case, you wish to buy a plan for your siblings, aunts, uncles or any other relatives, you can buy a separate plan for them.

Add Members you want to insure

Mobile Number

Port my existing Policy

or renew digit policy

You can select more than one member

-+ Max kids

(s)

Registration Number

Vehicle Owner Name

Mobile Number

+91

City

Mobile Number

+91

ENTER YOUR REGISTRATION NUMBER

DON'T KNOW YOUR REGISTRATION NUMBER

or renew digit policy

I agree to the Terms & Conditions

What is the Formula to Calculate Profit After Tax (PAT)?

Now that you have a basic understanding of Profit After Tax, you must be wondering about its calculation process. The following section will give you an idea of the formula for Profit After Tax.

Profit After Tax = Profit Before Tax - Tax rate

Profit Before Tax (PBT): One can calculate it by considering total expenses, including Opex and non-operating. It is then excluded from the Total revenue (operating and non-operating revenue).

Tax rate: The taxation is calculated based on PBT, while the geographical location of a company determines its tax rate.

An example will help you understand the formula of Net Profit After Tax further-

IABC Pvt Ltd earns annual revenue of ₹ 50,000. Its operating and non-operating expenses are ₹ 15,000 and ₹ 5,000, respectively. The tax rate is at about 30%.

Particulars	Amount
Annual revenue	₹ 50,000
Operating expenses	₹ 15,000
Non-operating	₹ 5,000
Tax rate	30%
Profit Before Tax (₹ 50,000 - ₹ (15,000 + 5,000)	₹ 30,000
Taxable amount (30% of ₹ 30,000)	₹ 9,000
Profit After Tax (₹ 30,000 - ₹ 9,000)	₹ 21,000

What is Profit After Tax: Definition, Formula & Importance Explained

What Is Profit After Tax (PAT)?

How Profit After Tax (PAT) is important for a Company?

What is the Formula to Calculate Profit After Tax (PAT)?

What Is the Significance of Profit After Tax (PAT)?

What Are the Advantages of Profit After Tax (PAT) Measures?

What Are the Disadvantages of Profit After Tax (PAT) Measures?

Frequently Asked Questions

✓ Why do profits decrease after-tax?

✓ Is profit after tax in a company the same as net profit?

More article about Income Tax in India

Switch to Digit Insurance

Get our app