Chapter 21 ___ Solved Past Papers Income Tax Numericals of CA Module C - (2001 to 2022)
Answer: (a)MR. QAMAR
Revised taxable income & tax thereon
For the tax year 2023
Rs. in '000'
INCOME FROM BUSINESS U/S 18(b) Briefly comment on treatment of the above items of expenses in your tax computation.(^522) ____ _ _Conceptual Approach to Taxes
INCOME FROM BUSINESS U/S 18
Sales of manufactured motors 45,000
Less: Revised cost of sales and administrative expenses
(excluding depreciation for the year) (N - 1)
13,150
Less: Brought forward business loss from tax year 2017
(Total business loss was Rs. 4 million)
9,150
Less: Tax depreciation for the current year (9,000)
Unadjustable tax depreciation - brought forward (b - 1) (500)
Total business loss for the year (Un absorbed depreciation of current year) (350)
INCOME FROM OTHER SOURCES U/S 39
Income form other sources (assumed net of allowable expenses and fully
covered under normal tax regime) 850
(4,000)
(31,850)
covered under normal tax regime) 850
Total income 500
(b - 2) 150
Taxable income 350
COMPUTATION OF TAX LIABILITY:
Tax under FTR on profit on PLS account Rs. 500,000 x 15% 75
Less tax already deducted at source - on bank profit @ 15% (75)
Balance tax payable -
ASSUMPTIONS / BASIS:
AstheincomeislessthanRs.400,000(maximumnontaxablelimit)andminimun
taxu/s 113 isalsonotapplicable(TurnoverlessthanRs. 100 million)hencetaxfor
the tax year has been computed as under.
Less Zaka paid under Zakat & Ushar Ordinance straight
deduciton U/s 60 of the Income tax Ordinance, 2001.
ASSUMPTIONS / BASIS:
(N - 1) Revised cost of sales
Rs. Rs.
Cost of sales as per question 33,000
Add:
Less:
Electricity charges - residence 150
Donation to a non-profit Orgnization 300
500
(1,150)
Revised cost of sales 31,850
Unabsorbed depreciation b/f from previous tax year
Fine paid for infringement of environmental laws 200
Answer: (b)
(1) Un-absorbeddepreciationofcurrentyearmaybeadjustedagainstanyotherheadofincomechargeable
totax(exceptincomeundertheheadsalary)undersection57(4)readwithsection56(1)oftheIncomeTax
Ordinance, 2001.
(4) Asthefineorpenaltyforvoilationofanylaw,ruleorregulationisnotallowableundersection21(g)ofthe
IncometaxOrdinance, 2001 hencethefinepaidforinfirngmentofenviornmentallawshasbeenaccordingly
deducted from the given cost of sales amount.
(2) Ithasbeenassumedthatthelimitationsofsection 60 hasbeenmetbytheAOPinordertoclaimthe
zakat as straight deduction from total income.
(3) Asthepersonalexpensesarenotallowableundersection21(h)oftheIncometaxOrdinance, 2001
hence the electricity charges of residence has been accordingly deducted from the given cost of sales amount.
(^522) __ ___ _Conceptual Approach to Taxes