Tax Book 2023

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

Name of investee company

Date No. of shares Price per share (Rs.)

XOK Limited 01-10-20 200,000 200

PBB Limited 18-08-21 55,000 145

10-01-21 100,000 150

During the year, AOP earned profit before tax of Rs. 8,500,000 from its principal business i.e. trading of garments. In

addition, AOP is also involved in purchase and sale of following securities listed on the Pakistan Stock Exchange:

Details of purchase

Libas & Co. is an association of persons (AOP) with three members, Saba, Junaid and Akram, sharing profit and loss in

the ratio of 1:1:2 respectively

(^482) ____ _ _Conceptual Approach to Taxes
10-01-21 100,000 150
OOI Limited 15 Feb 2023 [Note
B]
150,000 86
Name of investee company Date No. of shares Price per share (Rs.)
XOK Limited 29 June 2023 [Note
A]
200,000 225
PBB Limited 20-12-22 100,000 180
OOI Limited 15-03-23 150,000 78
Note A: Sale proceed from disposal of these shares was credited to the AOP's bank account on 2 July 2023.
Other information related to Saba:
Details of sale
Note B: Due to shortage of funds for making this purchase, AOP borrowed Rs. 5,000,000 in cash from Imran, who is in
the business of lending money at 15% per annum.
Other information related to Saba:
Required:
Answer
Libas & Co.
For the tax year 2023
Rupees
Income from business
Under the provisions of the Income Tax Ordinance, 2001, compute taxable income and tax liability of AOP and Saba for
the tax year 2023.
Computation of taxable income and tax liability of AOP
(i) During the year, she earned Rs. 1,500,000 by working as a freelance photographer.
(ii) On 1 April 2023, Saba received Rs. 1,100,000 from Zafar in full settlement of a loan. The loan was provided on 1 April
2022 at 10% per annum interest through proper banking channel
Income from business
Business profit for the year 8,500,000
Income from capital gain
Gain from sale of shares of XOK Limited [200,000×(225-200)] 5,000,000
Gain from sale of shares PBB Limited [55,000×(180-145)] 1,925,000
Gain from sale of shares PBB Limited [45,000×(180-150)] 1,350,000
(1,262,500)
Total capital gain 7,012,500
Income from other sources
Loan received in cash 5,000,000
Total income 20,512,500
Less: Separate block of income - income from sale of securities (7,012,500)
Taxable income of AOP under NTR 13,500,000
Loss from sale of shares of OOI Limited [150,000×(78-86)] - [5,000,000 x 15% x 1/12]
Taxable income of AOP under NTR 13,500,000
Tax liability
On Rs. 6,000,000 1,330,000
On remaining Rs. 7,500,000 @ 35% 2,625,000
3,955,000
876,563
Total tax payable 4,831,563
Saba
For the tax year 2023
Rupees
Profit on debt at 10% [1,100,000×(10/110)] - Taxable on receipt basis 100,000
Freelance income 1,500,000
Taxable income 1,600,000
Tax on capital gain - separate block of income [7,012,500×12.5%]-purchased before 1st
July, 2022
Computation of taxable income and tax liability of Saba
(^482) __ ___ _Conceptual Approach to Taxes