Tax Book 2023

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

Income from business for the tax year 2023 2,540,000

Drawings during the year 450,000

(iii) Balance of cash in hand and at bank, as on 30 June 2023 amounted to Rs. 157,500.

(iv) Transactions carried out by Zahid during the year were as follows:


 Paid an advance of Rs. 1,000,000 against purchase of a bungalow for Rs. 10,000,000.

Giftedsharesofalistedcompanytohisbrother.TheshareswerepurchasedbyZahidin 2018 atacostof

SoldsharesofalistedcompanyforRs.350,000.Theshareswerepurchasedon 1 May 2021 forRs.50,000.

Capital gain tax collected by NCCPL amounted to Rs. 37,500.

(^508) ____ _ _Conceptual Approach to Taxes

Paid Rs. 200,000 towards principal amount of the bank loan.

Personal expenses amounted to Rs. 2,075,000.

Net receipts against agricultural income amounted to Rs. 2,500,000.
Required:
Prepare Zahid’s wealth statement and wealth reconciliation statement for the tax year 2023.
ANSWER
Mr. Zahid
Wealth Statement
As on June 30, 2023 2023
Rupees

Giftedsharesofalistedcompanytohisbrother.TheshareswerepurchasedbyZahidin 2018 atacostof
Rs. 100,000 whereas market value of the shares at the time of gift was Rs. 150,000.
Rupees
Agriculture land in Hyderabad 5,000,000
Residential property in DHA Karachi 3,000,000
Investment in shares of listed companies (1,100,000–100,000–50,000) 950,000
Business capital FG & Co. (4,000,000+2,540,000–450,000) 6,090,000
Advance against bungalow 1,000,000
Motor Vehicle 1,540,000
Cash at banks 730,000
Cash 157,500
Total 18,467,500
Less: Bank loan – closing balance (1,300,000)
Wealth as on 30 June 2023 17,167,500
Wealth reconciliation statement
Wealth as on 30 June 2023 17,167,500
Wealth as on 30 June 2022Wealth as on 30 June 2022 14,040,000 14,040,000
Net increase in wealth 3,127,500
Inflows
Income from business 2,540,000
Agriculture income – Exempt 2,500,000
Capital gain [(350,000 – 50,000 – 37,500)] 262,500
5,302,500
Outflows
Gift to brothers – Listed company shares and shares sold 100,000
Personal expenses 2,075,000
2,175,000
Net increase in wealth 3,127,500
Q.1 September 2016
Rupees
Basic salary 250,000
Medical allowance 28,000
House rent 120,000
In addition to above, Baber was also provided the following:
BaberisworkingasGeneralMangerFinancewithHIFILimited(HFL)forthepasttwoyears,Thedetailsofhis
monthly emoluments during the year ended 30 June 2023 are as under:
(i)     Rs.900,000forsigningabondwithHFL.AccordingtothebondBaberwouldnotresignfromhis
employment before the expiry of 30 June 2023.
(ii)    Companymaintainedcarforbothofficialandprivateuse.Thecarwaspurchasedon 1 August 2022 ata
fair market value of Rs. 1,500,000.
(^508) __ ___ _Conceptual Approach to Taxes