Tax Book 2023

Chapter 21 ___Solved Past Papers Income Tax Numericals of CA Module C - (2001 to 2022)

Dr. Jamal is planning to establish a hospital as a non-profit organization.

Required:

Answer

Q.1 (b) Spring 2021

Discuss the conditions that should be complied with by Dr. Jamal, under the Income Tax Ordinance, 2001.

Conceptual Approach to Taxes ___ 477

(i) it is established for charitable purposes only;

(ii) he gets his clinic registered as a company or association of persons under any law;

(iii) he gets approval of the Commission for specified period; and

(iv) none of the assets of his clinic are available for private benefit to any other person.

Required:

Under the ITO-2001, an individual cannot form a non-profit organization. However, Dr. Jamal can run his clinic

as a non-profit organization if:

Q.2 (b) Spring 2021

Gillani and Company (GC), a sole proprietor, is dealing in various consumer products in Pakistan. During the

year ended 30 June 2023, GC's taxable income for the year was Rs. 1.6 million.

Under the provisions of the Income Tax Ordinance, 2001 compute the amount of net income tax payable by

GC and amount of income tax to be carried forward, if any, for the tax year 2023, in each of the following

(i)GC's sales were Rs. 212,500,000 inclusive of sales tax.

(ii)GC's sales were Rs. 111,000,000 inclusive of sales tax.

Answer

Situation 1 Situation 2

Income tax payable under normal tax regime

Taxable income 1,600,000 1,600,000

GC and amount of income tax to be carried forward, if any, for the tax year 2023, in each of the following

situations:

Computation of tax liability of Gillani & Co.

For the tax year 2023

--------- Rupees ---------

Taxable income 1,600,000 1,600,000

Income tax

On Rs. 1,200,000 60,000 60,000

On balance Rs. 400,000 @ 17.5% 70,000 70,000

A 130,000 130,000

Income tax payable under minimum tax

Gross sales 212,500,000 111,000,000

Less: Sales tax (17/117) (30,876,068) (16,128,205)

181,623,932 94,871,795

Turnover tax u/s 113 @ 1.25% B 2,270,299 *N/A

Tax liability of GC (Higher of A and B) 2,270,299 130,000

Carried forward of excess tax innext

succeding three tax years u/s 113(2)(c)

2,140,299 -

succeding three tax years u/s 113(2)(c)

*Because turnover is less than Rs. 100 million.

Rs. in '000

Turnover 324,850

Cost of goods sold (217,197)

Gross profit 107,653

Administrative and distribution expenses (88,980)

Marketing expenses (19,765)

Other income 3,560

Q.3 (b) Spring 2021

Muhammad Asghar owns an industrial undertaking under the name and style of Asghar & Company (AC)

which is engaged in the business of manufacturing pharmaceutical products. Following information is available

for the year ended 31 December 2022:

Conceptual Approach to Taxes ___ 477