Profit & Loss Statement Template in Excel (India)
Last updated: 27 June 2026
A profit and loss (P&L) statement summarises all revenue earned and expenses incurred during an accounting period; the bottom line is your net profit or loss. Indian businesses use either a vertical P&L (mandatory for registered companies under Schedule III of the Companies Act 2013) or a traditional horizontal T-format. The free Excel template below works for both formats and links directly to your ledger using SUMIF formulas.
Key takeaways
- A P&L covers one accounting period (monthly, quarterly, or annual) and shows revenue minus expenses, arriving at net profit or loss.
- Companies registered under the Companies Act 2013 must use the vertical format as prescribed in Schedule III, Part II.
- Sole proprietors and partnerships are not legally required to follow Schedule III but benefit from the same vertical layout for clarity.
- Always record revenue net of GST — GST collected is a liability, not income, and must not inflate your turnover figures.
- The standard progression is: Revenue → Gross Profit → EBITDA → EBIT → PBT → PAT.
- Link your P&L to your Excel ledger with SUMIF formulas so figures update automatically when transactions are posted.
- Depreciation must follow the correct method: Schedule II useful lives for Companies Act purposes, or WDV rates under the IT Act for tax purposes.
What is a profit and loss statement, and why does it matter for Indian SMBs?
A P&L (also called an income statement or statement of profit and loss) is one of the three core financial statements — alongside the balance sheet and cash-flow statement. It answers a single question: did the business make money during the period?
For Indian SMBs, the P&L is essential for:
- Filing income tax returns (Form ITR-3, ITR-5, or ITR-6 depending on entity type).
- Tax audit compliance — required if turnover exceeds ₹1 crore (or ₹10 crore if 95% or more of transactions are digital).
- GST annual reconciliation (GSTR-9) where turnover figures must match books.
- Bank loan applications — lenders ask for two to three years of P&Ls.
- MCA annual filings for companies (AOC-4 / AOC-4 XBRL).
What are the two P&L formats used in India?
Vertical format (Schedule III)
The vertical format reads top-to-bottom. Revenue sits at the top; expenses are deducted in layers; profit emerges at the bottom. This is the statutory format for all companies under the Companies Act 2013 (Schedule III, Part II). Most modern accounting software and CA firms use this layout even for non-company entities.
Horizontal / T-format
The horizontal format places income on one side and expenditure on the other, as a traditional account. Some sole proprietors and older trading firms still use this. It produces the same net profit figure but is harder to read and does not show intermediate subtotals such as gross profit or EBITDA.
For any new business or anyone filing with a CA, the vertical format is strongly recommended.
What does the vertical P&L layout look like?
| Line item | How to calculate | Excel formula hint |
|---|---|---|
| Revenue from Operations | Sum of all sales (GST-exclusive) | =SUMIF(Ledger[Account],"Sales",Ledger[Credit]) |
| Less: Cost of Goods Sold | Opening stock + Purchases + Direct expenses − Closing stock | =D5+D6+D7-D8 |
| Gross Profit | Revenue − COGS | =D4-D9 |
| Add: Other Income | Interest received, rental income, etc. | =SUMIF(Ledger[Account],"Other Income",Ledger[Credit]) |
| EBITDA | Gross Profit + Other Income − Operating expenses | Calculated subtotal |
| Less: Depreciation & Amortisation | Per Schedule II (Companies Act) or WDV (IT Act) | From depreciation schedule |
| EBIT | EBITDA − Depreciation | =D14-D15 |
| Less: Finance Costs | Bank interest, loan interest | =SUMIF(Ledger[Account],"Interest on Loans",Ledger[Debit]) |
| Profit Before Tax (PBT) | EBIT − Finance Costs | =D16-D17 |
| Less: Tax (current + deferred) | As per tax workings | From tax computation |
| Profit After Tax (PAT) | PBT − Tax | =D18-D19 |
Key Indian SMB line items inside COGS and operating expenses:
- Sales (GST-exclusive)
- Purchases (net of GST input credit)
- Freight inward / carriage
- Direct labour / job work charges
- Salaries and wages
- Rent
- Power and fuel
- Repairs and maintenance
- Depreciation
Fact box. Schedule III, Part II of the Companies Act 2013 mandates the vertical statement of profit and loss for all companies. Non-compliance can result in defective financial statements under Section 129, which carries penalties for directors and auditors.
How do I record GST correctly in my P&L?
This is the single most common error in SMB bookkeeping.
GST is never income. When you raise an invoice for ₹1,00,000 plus 18% GST, your revenue is ₹1,00,000. The ₹18,000 GST collected is a current liability (Output GST payable) on your balance sheet, not a receipt you earned.
The rule in your Excel template:
- Post the GST-exclusive invoice value to your Sales ledger account.
- Post the GST amount to an Output GST liability account.
- Your SUMIF formula for revenue pulls only from the Sales account, so GST never inflates turnover.
This also aligns with GSTR-9 reconciliation: your books' turnover should match the taxable value column in your GST returns, not the invoice total.
Fact box. Following the GST Council meeting on 22 September 2025, the 12% and 28% GST slabs were abolished. Current slabs are Nil, 5%, 18%, and 40%. Revenue recognition in books is always at the GST-exclusive amount regardless of the applicable slab.
How do I link the P&L to my Excel ledger using SUMIF?
The template uses a structured table named Ledger with at least these columns: Date, Account, Narration, Debit, Credit.
Step-by-step setup:
- Create your transactions sheet and select the data range. Go to Insert → Table and name it
Ledgerin the Table Design tab. - On your P&L sheet, use SUMIF to pull each line:
- Revenue:
=SUMIF(Ledger[Account],"Sales",Ledger[Credit]) - Purchases:
=SUMIF(Ledger[Account],"Purchases",Ledger[Debit]) - Salaries:
=SUMIF(Ledger[Account],"Salaries",Ledger[Debit]) - Interest on loans:
=SUMIF(Ledger[Account],"Interest on Loans",Ledger[Debit])
- Revenue:
- For account names with variants (e.g., "Sales — Domestic" and "Sales — Export"), use SUMIFS with a wildcard or add a
Categorycolumn and sum on that instead. - Calculate COGS:
= Opening Stock + Purchases + Direct Expenses - Closing Stock. Post opening and closing stock directly as named cells (they come from your stock register, not a ledger account). - Build each subtotal (Gross Profit, EBITDA, EBIT, PBT, PAT) as simple arithmetic of the SUMIF cells above.
When you add new transactions to the Ledger table, all P&L figures update automatically — no manual copying.
How does depreciation affect the P&L, and which rate should I use?
Depreciation is a non-cash expense that reduces the book value of fixed assets over their useful life. It appears between EBITDA and EBIT on your P&L.
Two sets of rules apply in India:
| Purpose | Applicable law | Method | Example: Computers |
|---|---|---|---|
| Financial statements (Companies Act) | Schedule II, Companies Act 2013 | Straight-line (SLM) or WDV based on useful life | Useful life 3 years |
| Income tax computation | IT Act, Section 32 | Written-down value (WDV) | 40% per annum |
| Income tax computation | IT Act, Section 32 | WDV | Plant & machinery 15% |
The difference between the two produces a deferred tax amount. For most small businesses and sole proprietors, only one set of rates is used (IT Act WDV is common because it drives the tax return). Companies preparing audited statements must follow Schedule II for financial reporting and compute tax depreciation separately.
Your Excel depreciation schedule should be a separate sheet, with asset-wise calculations feeding into both the P&L and the balance sheet.
Can I use the same template for my auditor and for my income tax return?
Broadly yes, with one important distinction: your P&L is your books of account figure. Your income tax return may show a different net profit after tax adjustments (disallowances, additional deductions under Chapter VI-A, etc.).
Your auditor (whether a statutory auditor under the Companies Act or a tax auditor under Section 44AB) will work from the same P&L you prepare. Audit adjustments are posted as journal entries, not separate statements.
Best practice: keep one master P&L tied to your ledger. Prepare a tax computation sheet as a separate workbook that starts from your book profit and applies IT Act adjustments (add back personal expenses, disallowed provisions, claim additional depreciation, deduct 80IC benefits, etc.).
Frequently asked questions
What is the difference between gross profit and net profit? Gross profit is revenue minus the direct cost of producing or buying what you sold (COGS). Net profit (PAT) is what remains after also deducting operating expenses, depreciation, interest, and tax. A healthy gross profit can still turn into a loss if overheads are too high.
Do sole proprietors need a P&L statement? There is no Companies Act obligation for sole proprietors, but under Section 44AA a non-specified business must maintain books once turnover exceeds ₹10 lakh or business income exceeds ₹1.2 lakh in any of the three preceding years (specified professionals: ₹1.5 lakh gross receipts under Rule 6F), and books are also needed if the tax audit threshold is crossed. In practice, any bank, NBFC, or trade creditor will ask for a P&L before extending credit or a loan.
How does depreciation affect my P&L? Depreciation is a non-cash deduction — it reduces profit without reducing your bank balance. Higher depreciation lowers PBT, which lowers tax. This is why businesses often prefer the WDV method under the IT Act: it front-loads depreciation, reducing tax in early years.
Can I use the horizontal T-format instead of the vertical format? Sole proprietors and partnerships can use either. Registered companies cannot — Schedule III mandates the vertical format. Even if you are not a company, vertical format is recommended because it shows gross profit and EBITDA, which are the numbers banks and investors actually look at.
What period should my P&L cover?
The standard Indian financial year is 1 April to 31 March. You can also prepare monthly or quarterly P&Ls for management use. The template supports any date range if your Ledger table includes a Date column and you add a date filter to your SUMIF (use SUMIFS with date criteria).
Is this template free to download? Yes — the Ankeshan P&L template is free to download, no sign-up required.
How Ankeshan helps
Ankeshan's Excel add-in (currently in waitlist) posts ledger entries, auto-builds the trial balance, and generates a Schedule III-compliant P&L and balance sheet with one click — no formula maintenance needed. If you would like early access, join the waitlist at ankeshan.com/waitlist.
Sources and disclaimer
- Companies Act 2013, Schedule III, Part II — Statement of Profit and Loss (MCA Notification, as amended).
- Income Tax Act 1961, Section 32 and Appendix I (depreciation rates).
- GST Council meeting decisions, September 2025 (slab restructuring).
- ICAI Guidance Note on Schedule III (2022 edition).
Disclaimer: This article is for general information only and does not constitute legal, tax, or accounting advice. Confirm current figures against the latest MCA, IT Act, or GST Council notifications before use. Consult a qualified CA for entity-specific guidance.