Tax Book 2023

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

Capital Gain (Separate block income)

282,000

Total income for the year 3,405,200

Less: Separate block income (282,000)

Taxable income for the year under NTR 3,123,200

Computation of net tax liability

Tax on Rs. 3,123,200 [Rs. 405,000 + 27.5% (Rs. 3,123,200 - 3,000,000) 438,880

35,250

Gain on the sale of 6,000 shares [432,000 – (6,000 × 25)]

[Assumed that the shares are of a public Ltd. Company) -

Income tax payable on Gain on disposal of securities - Separate

Block of income (Rs. 282,000 x 12.5%) - Purchased before 1st

(^506) ____ _ _Conceptual Approach to Taxes
474,130
Less: Tax paid under (200,000)
Balance tax payable 274,130
W-1: Computation of tax depreciation
Depreciation on furniture (200,000 × 15%) 30,000
Used imported machine
Initial allowance (500,000 × 25%) 125,000
Depreciation [(500,000 – 125,000) × 15%] 56,250
Depreciation on additions 181,250
Depreciation for the year 211,250
211,250
Block of income (Rs. 282,000 x 12.5%) - Purchased before 1st
211,250
Q # 2 March 2017
(i)ApaintingwhichsheinheritedfromherfatherwassoldforRs.1,250,000.Themarketvalueofthepainting
at the time of inheritance was Rs. 1,550,000. The painting was purchased by her father for Rs. 1,000,000.
Saleha is a resident person. She disposed of the following assets during the tax year 2023.
(iii)ShedisposedofhercarforRs.1,800,000.Thecarwasbeingusedforthepurposesofherbusiness.The
taxwrittendownvalueofthecaratthebeginningoftaxyear 2023 wasRs.1,600,000.Therateofdepreciation
for tax purposes is 20%.
(ii)ShesoldjewelleryforRs.2,300,000whichwaspurchasedbyherhusbandinMarch 2020 forRs.1,300,000
and gifted to her on the same date.
Required:
ANSWER:
UndertheprovisionsoftheIncomeTaxOrdinance,2001,discussthetaxabilityofeachoftheabove
transactions in the context of capital gain/loss.
(iv)On 20 October 2022 shesoldadiningtabletoFaheemforRs.18,000whichshehadpurchasedon 15
May 2020 for Rs. 15,000 for her personal use.
(i)SinceSalehainheritedpaintingsfromherfather,theCostoftransferoronthedateoftransferofthepainting
onthedateofitsacquisition/transferwouldbetreatedtobeitscost.Hence,costofthepaintingwouldbeRs.
1,000,000. and there is a gain of Rs. 250,000.
(ii)ThecostoftheJewellerywouldbeRs.1,300,000i.e.thevaluethereofatthetimeofgift.Therefore,the
gain of Rs. 1,000,000 should be recognized.
Q # 3 MARCH 2017
(iii)ThecarsoldbySalehawasbeingusedbyherforbusinesspurposesandthereforedepreciationwasalso
beingchargedonit.However,depreciableassetsarespecificallyexcludedfromthedefinitionofcapitalassets.
Therefore,no capital gain or loss would arise on the disposal of car.
gain of Rs. 1,000,000 should be recognized.
On 1 June 2022 DawoodandDewanjointlypurchasedabungalowforRs. 35 million.Theypaidtheamountin
theratioof65:35respectively.Toarrangefundsforthedeal,DawoodborrowedRs.3,000,000incashfrom
Shameem who is in the business of lending money. The rate of interest is agreed @ 20% per annum.
(iv)Nocapitalgain/losswillariseasanymovablepropertyheldforpersonalusebythepersonisexcluded
from the definition of capital assets.
On 1 July2022,thehousewasletouttoacompanyatannualrentofRs.4,500,000inclusiveofanamountof
(^506) __ ___ _Conceptual Approach to Taxes