Tax Book 2023

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

INCOME FROM PROPETY U/S 15 Rupees Rupees

            Forfeited deposit 500,000

            Rent received from tenants (Rs. 150,000 x 10) 1,500,000

Rent from immoveable property 2,000,000

Income year ended : June 30, 2023

Personal Status : Individual

Tax Year : 2023

Conceptual Approach to Taxes ___ 511

Rent from immoveable property 2,000,000

Fair market rent (Annaul letting value as per valuer) 2,160,000

Higher of rent and Fair market rent 2,160,000

Unadjustable advance (Rs. 200,000 / 10) 20,000

2,180,000

Less: admissible deductions u/s 15A

• (650,000)


• 
  

  Ground rent (50,000)

  
  


• 
  

  (87,200)

  
  

Insurance premium (not allowable against plot)

Gross rent chargeable to tax

20% repair allowance (not allowable against plot)

Mark up on debt for acquisition of plot (Rs.6,500,000 x 12% x

10/12)

Levelling expenses (not allowable u/s 15A)

Admin & collection charges (lower of actual charges OR 4% of

gross rent chargeable to tax) (Rs. 140,000 OR 87,200)

• (787,200)
  Net income from property 1,392,800
  INCOME FROM BUSINESS U/S 18

Business income given in question -

Less mark up on loan used for business

(Rs. 1,500,000 X 12% for entire year)

180,000 (180,000)

1,212,800

Q. NO. 1 SPRING 2016

LoneTraders(LT),asoleproprietorship,isengagedinthebusinessofbuyingandsellingofMaize and

Wheatinbulkquantities.FollowinginformationhasbeenextractedfromLT’srecordsfortheyearended 31

Total and taxable income

Valuation expenses paid (not allowable u/s 15A)

gross rent chargeable to tax) (Rs. 140,000 OR 87,200)

• LT incurred expenditure of Rs. 25,000 in respect of above future contract.

Wheatinbulkquantities.FollowinginformationhasbeenextractedfromLT’srecordsfortheyearended 31

December 2022:

• Wheat sold to food companies in Punjab amounted to Rs. 13,000,000. The sale was made after allowing
  discount of Rs. 680,000 to some of the new customers. The gross profit margin was 25% on gross sales.


• LTpaidRs.600,000toaresearchinstituteforthedevelopmentofaformulawhichislikelytoimprovethe
  quality of wheat it purchases from the growers.


• In October 2022 price of maize increased to Rs. 18,240 per metric ton and LT sold the entire lot to ME
  without taking delivery.


• Administrative, selling and distribution expenses amounted to Rs. 2,500,000. These included a penalty of
  Rs. 45,000 which was imposed due to late payment of sales tax on wheat.


• InAugust2021,LTsignedafuturecontractwithMubarakEnterprises(ME)forthepurchaseof 500 metric
  tonsofmaizeatRs.15,800permetricton.ThedeliverywasexpectedtobemadeinOctober2022.MEalso
  agreed to repurchase the entire lot at the price prevailing on the date of sale.

Assessed losses brought forward from previous year were as follows:

Rupees

Trading business loss 550,000

Speculation business loss 300,000

Capital loss 250,000

Required:

ANSWER.

Speculation Trading

Business Business Total

Lone Traders (soleproprietorship)

Computation of taxable income and income tax liability

For the tax year 2023

Under the provisions of the Income Tax Ordinance, 2001 and Rules made thereunder, compute LT’s

taxable income/(loss) and the amount of loss to be carried forward, if any, for tax year 2023.

Rs. 45,000 which was imposed due to late payment of sales tax on wheat.

Conceptual Approach to Taxes ___ 511