Tax Book 2023

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

Computation of Taxable Income and Tax Liability of each Member

Farhan Kamran Rehan

Income under NTR

Salary 1,000,000 800,000 600,000

Interest 500,000 400,000 300,000

Share of profit (2,000,000÷5=180,000×2:2:1)

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Conceptual Approach to Taxes ___ 487

Share of profit from PKR 2,300,000 2,000,000 1,300,000

Share of loss from another AOP(Not allowed) - - -

Income from sole proprietorship businesses - 800,000 -

Taxable income 2,300,000 2,800,000 1,300,000

Income for rate purposes 2,300,000 2,800,000 1,300,000

Tax liability of Kamran on income from

other business

Tax on Rs. 2,400,000 - 270,000 -

22.5% on amount exceeding Rs. 2,400,000 - 90,000 -

Total tax payable 360,000

Tax rate to be chargedTax rate to be charged 0 0 12.86%12.86% 0 0

Tax liability of Kamran (excluding share

from AOP)

• 102,880 -

Income under FTR

Dividend income (Rs.102,000 /0.85) - u/s 5 120,000

Tax on dividend income (Rs. 120,000×15%) - u/s 168 18,000

Tax deducted at source (18,000)

Balance tax of Rehan -

Following are the incomes of three resident individuals A, B and C during the tax year 2023

Q.5(a) Spring 2020

A B C

Head of income

Income from property 200,000 150,000 4,100,000

Income from business - 360,000 160,000

Required:

Answer

In the case of A

Since A's total income from property is less than Rs. 200,000 and he has no other source of

income, his income from property will not be chargeable to tax.

In the case of B

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Discuss the tax treatment of income from property of each of the above individuals while computing the taxable income

under the Income Tax Ordinance, 2001

In the case of B

Although B's income from property is less than Rs. 200,000, his income would be chargeable

to tax as he has other source income.

In the case of C

Since C's income from property is more than Rs. 4 million, he has the following option

(i) Leave encashment of Rs. 600,000.

Chargeable to tax under NTR where he would be taxed at the rate applicable on non-salaried individuals.However, in this

option, he is allowed to claim expenditure incurred on property.

Q.5(b) Spring 2020

Sajid retired from Sun Chemicals Limited (SCL) as a marketing manager with effect from 31 December 2022. He received

the following amounts in final settlement from SCL

Conceptual Approach to Taxes ___ 487