Tax Book 2023

Chapter 30 Solved Past Papers Income Tax Numericals of ICMAP Stage IV - (2003 to 2018)

A/B x Net FSI 205,004 (205,004)

Speculation Business

Lower of:

Foreign tax payable, or 150,000

37,546 (37,546)

(195,000)

Balance tax payable 67,825

Q. 4 Summer 2018

Rupees

Basic salary 480,000

Utilities allowance 30,000

(505,375 /3,365,000x

1,365,000)

Withholding tax u/s 149

A/B x Net FSL (505,375/3,365,000x

250,000)

(19,500x 10)

Mr. Rizwan is working as Director Finance with Kin Kong Limited (KKL) for the last one year. The

details of his monthly remuneration, during the year ended June 30, 2023, are as under:

744___ Conceptual Approach to Taxes

Utilities allowance 30,000

Medicall allowance 42,000

House rent allowance 165,000

In addition, Mr. Rizwan was also provided the following:

.

.

.

.

.

A company maintained 1600cc car has been given for both official and private use. The

car was purchased by the company at a fair market value of Rs. 1,900,000 on

September 01, 2022.

During the tax year, Mr. Rizean got an offer from another company. However, he agreed

to stay with KKL employment against an additional amount of Rs. 1,200,000.

Provident fund (PF) contribution of Rs. 15,300 per month. An equal amount per month

was contributed by Mr. Rizwan to the fund. Interest income of Rs. 542,000 at the rate of

20% of accumulated balance of PF was credited to his PF account. The fund is

recognized by commissioner Inland Revenue.

On March 01, 2023, KKL sold and item of inventory of Mr. Rizwan for Rs. 23,000. The

net realizable value of the item on inventory at the end of February 28, 2023 and June

30, 2023 was Rs. 45,000 and Rs. 49,000 respectively KKL had acquired it in July 2022 at

a cost of Rs.34,000.

An option was granted to Mr. Rizwan in November 2022 to acquuire 3,400 sahare in

KKL. The option was exercisable after completion of one year of service with KKL.

Mr. Rizwan paid an amount equivalent to Rs. 325,000 to acquire the option when the fair Mr. Rizwan paid an amount equivalent to Rs. 325,000 to acquire the option when the fair

market value of the option was Rs. 400,000. On December 01, 2022, he paid an amount

equivalent to Rs. 270,000 to acquire the shares in KKL. The shares were issued to him

on December 19, 2022 when the market value was Rs. 425 per share.

On May 23, 2023, Mr. Rizwan sold 2,400 shares and received net proceeds equivalent to

Rs. 1,725,000 in his bank account. This amount was received after deduction of bank

charges of Rs. 7,250 and brokerage commission equivalent to Rs. 14,000.

744___ Conceptual Approach to Taxes