Tax paid on capital gains arising from sale of fixed assets or investments is shown under Investing Activities as a cash outflow, because the capital gain itself relates to investing activity. This is an exception to the general rule of classifying taxes under Operating Activities.
Tax paid on capital gains by the company is shown in Cash Flow Statement as :
CUET UG 2023 — Accountancy Financial Statements
2023mcqhard
Tax paid on capital gains by the company is shown in Cash Flow Statement as :
Official previous-year question
Held on 11 Jun 2023 · Verified 13 Jul 2026.
Options
- A
Cash flow from Operating Activities
- B
Cash outflow from Investing Activities
- C
Cash from Financing Activities
- D
Not Considered in cash flow statement
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