A shopkeeper marks his goods at 40% above the cost price but allows a discount of 5% for cash payment to his customers.

Let the original cost price of the item be Rs. $x$.

$\mathrm{MP}=x+\frac{40 x}{100}=1.4 x$

Discount $=M P-S P$

$\mathrm{MP}-\frac{\text { Discount } \% \times \mathrm{MP}}{100}=\mathrm{SP}$

$1.4 x-\frac{5 \times 1.4 x}{100}=1064$

$\frac{1.4 x \times 100-5 \times 1.4 x}{100}=1064$

So, $x(1.4)(0.95)=1064$

$x=\frac{1064}{(1.4 \times 0.95)}$

$=\frac{1064}{1.33}$

$=$ Rs. 800

Profit $=$ Rs. $(1064-800)$

$=$ Rs. 264

Thus, the actual profit by the shopkeeper is Rs. 264 .