Profit after interest and tax is ₹ $1,60,000$.$10\%$ Long-term borrowing is ₹ $20,00,000$.Rate of Tax is $20\%$.Profit before interest and tax will be:

To calculate the Profit Before Interest and Tax (EBIT), we work backwards from the Profit After Tax (PAT):Calculate Profit Before Tax (PBT):
$$\text{PAT}=\text{PBT}\times (1-\text{Tax Rate})$$
$$\text{₹ }1,60,000=\text{PBT}\times (1-0.20)$$
$$\text{₹ }1,60,000=\text{PBT}\times 0.80$$
$$\text{PBT}=\frac{\text{₹ }1,60,000}{0.80}=\text{₹ }2,00,000$$
Calculate Interest on Long-term Borrowings:
$$\text{Interest}=10\%\text{ of ₹ }20,00,000=\text{₹ }2,00,000$$
Calculate Profit Before Interest and Tax (EBIT):
$$\text{EBIT}=\text{PBT}+\text{Interest}$$
$$\text{EBIT}=\text{₹ }2,00,000+\text{₹ }2,00,000=\text{₹ }4,00,000$$