After Tax Profit = Pretax Profit * (1 - Tax Rate)

Solve for Tax Rate

Tax Rate = 1 - (After Tax Profit/Pretax Profit)

profit after tax

Gross Profit or Earning Before Interest and Tax (EBIT) Less : Interest Earning Before Tax (EBT) Less : Tax Net Profit or Profit After Tax (PAT)

1. Tax is a deductable item from accounting profit as tax is calculated on profit before tax amount to reach at profit after tax account which is also the net profit available for distribution to share holders of company.

We use the deemed profit in tax because it simplifies the tax.