Tax Book 2023

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

Compute Saleem’s taxable income under appropriate head of income and tax liability for the tax year 2023.

Answer

Rupees

Income from business

Accounting profit before adjustment 2,350,000

Saleem

Computation of taxable income for the year 2023

(^498) ____ _ _Conceptual Approach to Taxes
Add: Inadmissible expenses/admissible income
Rental charges - withholding tax deducted but not deposited 1,560,000
Depreciation on leased assets 600,000
Financial charges on leased assets 462,000
2,622,000
4,972,000
Less: Admissible expenses/inadmissible income
Accounting profit on sale of vehicle 1,000,000
Lease rental (857,000 × 70%) 599,900
Accounting gain on the sale of shares 50,000
Tax Gain on disposal of a passenger transport vehicle (Note 1) (2,007,352)
(357,452)
5,329,452
Income from capital gainIncome from capital gain
Gain on the sale of share of Sun (Private) Limited 500,000
Gain on the sale of securities
Moon Limited (700,000)
Planet Limited 250,000
(450,000)
Total income 5,829,452
Computation of tax liability
Tax on 4,000,000 680,000
Tax on income exceeding 4,000,000 @ 32.5% (1,829,452×32.5%) 594,571
Tax payable under NTR 1,274,571
Advance tax collected at the time of vehicle purchased (85,000)
Balance tax payable 1,189,571
Note 1: Loss on disposal of a passenger transport vehicle
Consideration received on disposal of passenger transport vehicle not
plying for hire A×B/C Where (9.5×7.5/8.5)
Written down value of vehicle (7.5×85%) 6,375,000
Gain on disposal 2,007,352
(a) of sub-section (13) Rs. 7.5 million; and C is the actual cost of acquiring the
vehicle Rs. 8.5 million.)
(A is the amount received on disposal of the vehicle Rs. 9.50 million; B is the amount referred to in clause 8,382,352
(^498) __ ___ _Conceptual Approach to Taxes