Tax paid on capital gains by the company is shown in Cash Flow Statement as:
- ACash flow from Operating Activities
- BCash outflow from Investing Activities
- CCash from Financing Activities
- DNot Considered in cash flow statement
Solution & Step-by-step Explanation
Under Accounting Standard 3 (AS-3), taxes on income are generally classified as cash flows from operating activities. However, if the tax expense can be explicitly and directly identified with an investment activity transaction (like capital gains tax on the sale of fixed assets), it is classified as a Cash outflow from Investing Activities.