Tax Book 2023

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

750,000 -

Other sources U/S 39

Current year income 1,250,000

Balance income from other sources 250,000

Speculation U/S 18

Current year income 500,000

Brought forward losses (250,000) 250,000

Net foreign source of income 500,000

Add Pakistan source of income 2,500,000

Theunadjustedcapitalloss to c/f foradjustmentagainst

succeeding years capital gains.

Conceptual Approach to Taxes ___ 529

Add Pakistan source of income 2,500,000

Total taxable income 3,000,000

COMPUTATION OF TAX LIABILITY:

Tax on Rs. 3,000,000 [270,000 + 22.5% x (3,000,000 - 2,400,000)] 405,000

187,500

33,750

Hence lower allowed as tax credit (33,750)

(Rs.405,000 / 3,000,000 x 250,000)

• Foreign tax paid on income from other sources or


• Pakistan tax on net foreign source of income

Less: tax credit on foreign source of income under respective

heads:

Tax credit on income from other sources shall be allowed on

lower of:

125,000

33,750

Hence lower allowed as tax credit (33,750)

Balance tax payable^ 337,500^

Notes:

Tax credit on speculation income shall be allowed on lower of:

• Foreign tax paid on speculation income or


• Pakistan tax on net speculation income
  (Rs.405,000 / 3,000,000 x 250,000)

Less: tax credit on foreign source of income under respective

heads:

1. Non speculation losses adjusted against firstly income form other sources and balance against specualtion
   income.


2. Last year unadjusted foreign tax credit on income from other sources is not allowed to be refunded, carried
   forward or carried back.


3. The income tax given in question only on Pakistan source of income has been ignored as credit shall be on

Q.1 Autumn 2012

(A) INCOME FROM BEENA and CO.

Income Statement Note Rupees

Revenue (i) 8,500,000

Less: Expenses

Salaries (ii) 2,000,000

Gifts and donations (iii) 400,000

Lease charges (iv) 900,000

3. The income tax given in question only on Pakistan source of income has been ignored as credit shall be on
   total tax liability basis that is Pakistan source income plus foreign source income.

BeenaSikandarisalawyerandownsalawfirmunderthenameBeenaandCo.SheisalsoDirectorLegal

Affairs at Ayesha Foods Limited. Details of her income for the tax year 2023 are as follows:

Gifts and donations (iii) 400,000

Lease charges (iv) 900,000

Professional fee (v) 400,000

Property expenses (vi) 350,000

Travel expenses 150,000

Other expenses (vii) 600,000

Tax withheld by clients 200,000

5,000,000

Net profit 3,500,000

Notes to the Income Statement

(i)RevenueincludesRs.750,000recoveredfromRafiainrespectofbaddebtsthathadbeenwrittenoffwhile

calculatingthetaxableincomeforthetaxyear2021.Theamountwasreceivableagainstprofessionalservices

rendered to Rafia.

(ii)SalaryexpensesincludeamountofRs.50,000andRs.75,000permonthpaidtoBeenaandherbrother

respectively. Her brother looks after administration and financial matters of the firm.

Conceptual Approach to Taxes ___ 529