Tax Book 2023

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

(120,000) 60,000

Utilities allowance (Rs.10,000 p.m) 120,000

35,000

540,000

Less: 10% of basic salary exempt U/C 139 (Rs.1,200,000 x

10%)

Conveyance facility provided for personal and official use

Taxable at 5% of cost of conveyance (700,000 x 5%)

Higher of (Rs.240,000 (20,000 x 12) or Rs.540,000 (45% x

1,200,000))

Rent free accommodation (Higher of FMR or 45% of MTS or

Basic pay)

Special allowance is not taxable as it is reimbursed for actual

business purposes

Conceptual Approach to Taxes ___ 557

Total taxable income 1,955,000

COMPUTATION OF TAX LIABILITY:

Tax on Rs. 1,955,000 [15,000 + 12.5% x (1,955,000 - 1,200,000)] 109,375

Per month tax to be deducted by employer (Rs. 109,375 / 12 months) 9,115

Q.NO. 1 Spring 2006

Rupees

(i) Basic salary 100,000per month

(ii) House rent allowance 40,000per month

(iii) Utilities allowance 15,000per month

business purposes

Ms.FatimaHasanwasworkingasaMarketingHeadwithConsumerProductsLimited(CPL)atfollowing

emoluments:

(iii) Utilities allowance 15,000per month

During the year, Fatima has also undertaken the following transactions:

(i) Shares in QP (Pvt.) Ltd. were sold for Rs. 500,000. These shares were acquired in the year 2016 at a cost

Inadditiontotheabovecashemoluments,shewasprovidedwithaHondaCiviccar,exclusivelyforofficial

use.ThecostofcartotheCompanywasRs.1,000,000.AsperCompany’spolicy,thecarwassoldtoFatima

inJanuary 2023 atthewrittendownvalueofRs.100,000whereasthefairmarketvalueofthesameatthe

time of sale was Rs. 300,000.

InMay2023,FatimawasapproachedbyPharmaIndustries(Pvt.)Limited(PIL).Theyofferedheremployment

atahighersalaryandsomeextrabenefits,alongwithaonetimepaymentofRs.200,000asaninducementto

accepttheiroffer.FatimaacceptedPIL’sofferbyresigningfromCPLwitheffectfromJune1,2023.Shejoined

PIL from July 1, 2023. The amount of Rs 200,000 was, however, paid to her on June 29, 2023.

(iii) A painting purchased at a cost of Rs. 100,000 was sold for Rs. 75,000.

(vi) She received a fee of Rs. 100,000 in consideration for preparing a research paper for a foreign University.

Fatima incurred Rs.10,000 on the printing of research paper and courier charges for sending the paper abroad.

(v) Dividend of Rs. 50,000 was received on account of shareholding in a listed Company. Tax of Rs. 5,000

was deducted u/s 150.

(i) Shares in QP (Pvt.) Ltd. were sold for Rs. 500,000. These shares were acquired in the year 2016 at a cost

of Rs. 200,000.

(ii) A residential plot inherited in the year 2000 was sold for Rs. 1,000,000. The fair market value of the plot at

the time of inheritance was Rs. 200,000.

(iv) She had won a cash prize of Rs. 250,000 in a quiz show. Tax of Rs. 50,000 was deducted from the prize

money u/s 156.

(vii) An amount of Rs. 50,000 was donated to an approved charitable institution.

Solution of Q.NO. 1 Spring 2006

Name of Taxpayer : Fatima Hassan

Income year ended : June 30, 2023

INCOME FROM SALARY Rupees Rupees

Personal Status : Individual

National Tax Number :

Tax Year : 2023

Inthelightofaboveinformation,computethetaxableincomeofMs.Fatimaforthetaxyear 2023 bygiving

brief explanation for the items not included in the taxable Income.

Residential Status : Resident

Conceptual Approach to Taxes ___ 557