This is the tax on profit earned that a company owes the Government. This tax is very similar to income tax an individual pays on his income. In India, a flat 25% tax is levied on profits earned by domestic companies.

Navyas’ pizza company has earned Rs.10,82,000 profit before tax during the first quarter. Assuming a 25% tax rate, the tax amount will be Rs.2,70,500 (10,82,000 * 25%).