Tax Book 2023

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

personal purposes. The hotel has leased the car from a bank. The gross lease rentals payable over the period

of lease amount to Rs. 2,700,000. The fair market value of the car at the time of lease was Rs. 1,600,000. The

total lease rentals paid by the hotel during the year amounted to Rs. 800,000.

(iv) He is entitled to lunch at the hotel’s restaurants where the usual charges are Rs. 400 per person. He is

entitled to concessional rate of Rs. 40 per day which is deducted from his salary. Assume that there are 300

working days in the year.

(v) He went for a training course to Islamabad where boarding and lodging cost amounting to Rs.150,000

was borne by the hotel. He incurred a further expense of Rs. 125,000 which was reimbursed by the hotel.

Conceptual Approach to Taxes ___ 547

(vi) Provident fund was deducted @10% of his basic salary. An equal amount was contributed by the hotel.

hInterest credited to his provident fund account amounted to Rs. 48,000.

(vii) As per terms of employment agreed with Mr. Manto, tax of Rs. 249,200 on salary will be borne by the

hotel.

(viii) During the year, he also received an amount of Rs. 90,000 (net of 10% withholding tax) from a local

University where he gave lectures on hotel management.

(ix) On July 15, 2022, he received a lump sum amount of Rs. 4,000,000 through a normal banking channel as

final settlement from Berlin Hotel.

(x) On August 1, 2022, he inherited 25,000 shares of a private limited company. The estimated fair market

value of the shares, on the date of inheritance, was Rs. 42 per share. He sold all the shares on February 28,

2023 at Rs.62 per share.

(xi) He paid zakat amounting to Rs. 200,000 to an approved organization, through cross cheque.

Required:

(a) Compute Mr. Manto’s taxable income and tax payable for the tax year 20223

(b) Briefly explain the treatment of items which are not considered in the above computation.

Solution of Q.NO.1(a) Spring 2009

Income year ended : June 30, 2023

Tax Year : 2023

Name of Taxpayer : Mr. Manto

National Tax Number :

2023 at Rs.62 per share.

(Rs.) (Rs.)

INCOME FROM SALARY U/S 12

Basic salary (Rs.100,000 x 12 months) 1,200,000

House rent allowance (Rs.30,000 x 12months) 360,000

Medical allowance (Rs.10000 x 12 months) 120,000

(As the free medical facility seperately been provided hence

medical allowance shall be totally taxable)

Value of conveyance (5% of FMV (1,600,000 x 5% of leased car) 80,000

108,000 -

275,000 -

Tax Year : 2023

Personal Status : Individual

Residential Status : Resident

Lunch at concessional rate (Exempt U/C (53A) as marginal cost

to employer) [(Rs.400 - 40) x 300 days]

Training and boarding and lodging cost (Exempt being for

official purposes)

Employer's contribution for recognized

provident fund

120,000

Less: Exempt upto lower of 10% of basic salary or 150,000 (120,000) -

• Interest on provident fund 48,000
  (400,000) -
  Tax liability paid by hotel 249,200


• 
  

  Total income from salary 2,009,200

  
  

CAPITAL GAINS

Less: Exempt upto higher of 1/3rd of salary or calculated @

16%

Amount received as final settlement from Berlin Hotel (not to include in income u/s

51 & 102)

Lessor of (10% x Rs.1,200,000)120,000 or Rs.150,000

Employee contribution (not to be included as already included in

salary)

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