Tax Book 2023

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

Other information relevant to the tax year 2023 is as under:

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Required

On November 01, 2022, he borrowed a loan amounting to Rs. 20 million from a schedule

bank for the acquisition of a new house. The interest paid till June 30, 2023 amounted to

Rs. 1,700,000.

On October 01, 2022, Mr. Rizwan fell ill and was admitted to Hope Hospital. The

company reimbursed him the actual expenses incurred at the hospital amounting to Rs.

85,000.

Mr. Rizwan received net dividend of Rs. 92,700 from ABC Limited,a company listed on

pakistan Stock Exchange Limited (PSX). Withholding tax and Zakat deducted from

dividend amounted to Rs. 9,270 and Rs. 5,400 respectively. He also received a dividend

of Rs. 125,000 from a company in Singapore through normal banking channels.

However, no tax was withheld either in pakistan or singapore.

Withholding tax deducted from Mr. Rizwan's salary during the tax year 2023 amounted to

Rs. 1,415,000.

Under the provisions of the Income Tax Ordincne, 2001 and Rules made thereunder, compute the

Conceptual Approach to Taxes _____745

Answer 4 Summer 2018

Mr. Rizwan

computaation of Taxable Income and Tax Liability

for the tax year 2023

Rupees

Note Taxable Exempt

Salary

Basis salry (450,000 x12) 5,400,000

Utilities allowance (30,000x12) 360,000

Medical allowance (42,000x12) 504,000

Less: Exempt upto 10% of basic salary - 504,000

Medical reimbursement 85,000

House rent allowance (165,000x12) 1,980,000

Vehicle (1,900,000 x5%) 95,000

Restrictive covnenant 1,200,000

Provident fund

Employes contribution [sixth schedule]

Contribution (15,300x12) 183,600

Less:Lower of

Under the provisions of the Income Tax Ordincne, 2001 and Rules made thereunder, compute the

taxable income and net tax payable by or refundable to Mr. Rizwan for the tax year 2023.

Rs 150,000 150,000

(Basic salary+D/A) x10% (5,400,000x 10%) 540,000

150,000 33,600 150,000

Interest

Amount of interest 542,000

Less:higher of

16% of interest (542,000/20x16) 433,600

(Basic salary +D/A) x1/3 (5,400,000/3) 1,800,000

Conceptual Approach to Taxes _____745