Chapter 21 ___ Solved Past Papers Income Tax Numericals of CA Module C - (2001 to 2022)
(iv)Avehiclewasobtainedsolelyforofficialpurposesonoperatinglease,fromabank.Theleasecommenced
on 1 March 2023. Lease charges include Rs. 500,000 paid as security deposit to the bank.(v)TheprofessionalfeeincludesanamountofRs.150,000paidtoalegalfirmfordefendingalawsuitfiled
against Beena, in a family court.
(vi) Beena lives in an apartment situated above her office, and two-fifths of the total property expenses relates
to this apartment.(iii)Giftsanddonationsincludegiftstoclients,gifttohersonanddonationtoEdhiFoundationamountingto
Rs. 100,000, Rs. 50,000 and Rs. 250,000 respectively.(^530) ____ _ _Conceptual Approach to Taxes
(B) DIRECTOR'S REMUNERATION FROM AYESHA FOOD LIMITED
(i) Beena received monthly remuneration of Rs. 100,000 from AFL.
to this apartment.
(iii) Beena has also been provided a vehicle, by AFL, for her personal as well as business use. The car was
acquired by AFL in May 2018 at a cost of Rs. 2,000,000. The fair market value of the car as at 30 June 2023
was Rs. 1,500,000.
(vii)OtherexpensesincludeanamountofRs.150,000paidforBeena'sGolfClubmembershipwhichshe
exclusively used to promote her business interests. The payment to the club was made in cash.
(ii) During the year, she also received two bonus payments of Rs. 100,000 each. One of the bonus pertains to
tax year 2022. It was announced last year but disbursed to her in the current year.
(v) Details of tax deducted by AFL are as follows:
Rupees
From salaries 390,000
9,000
Required:
Solution
Beena Sikandar (Resident)
(iv) She received a fee of Rs. 150,000 from AFL for attending the meetings of the Board of Directors (BOD).
Computethetaxableincome,taxliabilityandtaxpayablebyBeenaSikandarforthetaxyear2023.Provide
appropriatecommentsontheitemsappearinginthenoteswhicharenotconsideredbyyouinyour
computation.
From fee received for attending the meetings of BOD
Beena Sikandar (Resident)
For the tax year 2023
Note Rupees
INCOME FROM BUSINESS U/S 18
Profit before tax as per accounts 3,500,000
Add:
Tax withheld by clients 200,000
Salary paid to Beena 600,000
Gifts to clients and son 1 150,000
Donation to Edhi Foundation 1 250,000
Security deposit on operating lease 2 500,000
150,000
140,000
Computation of taxable income and tax liability
Legal charges paid for personal law suit
Rent related to personal apartment (2/5 x 350,000) 140,000
Club membership fee paid in cash 150,000
2,140,000
5,640,000
INCOME FROM SALARY
1,200,000
Bonus received in tax year 2023 3 200,000
Conveyance (2,000,000 x 5%) U/R 5 100,000
4 150,000
1,650,000
Total taxable income 7,290,000
COMPUTATION OF TAX LIABILITY:
Monthly remuneration from AFL (Rs. 100,000 x 12)
Fee as employee for attending meeting of the BOD
As the taxable salary income does not exceeds 75% of taxable income, hence it a non-salaried individual tax
rates will be aapplicable
Rent related to personal apartment (2/5 x 350,000)
(^530) __ ___ _Conceptual Approach to Taxes