Tax Book 2023

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

600,000

14,000

112,000

38,000

40,000

Required:

Digital Ltd. deducted amounting to Rs. 22,000 in respect of tax from the payment of

rent made during the tenancy agreement.

Bank charges for the clearance of the cheques for the rent paid by Digital Ltd.

Profit paid to a bank on a loan for the reconstruction of a portion of house

Legal expenditure for preparing the legal notice to Digital Ltd. for recovery of rent

Legal fee paid to a lawyer in cash for defending the title of the house challenged by

Mr. Israr's relative in a court of law

Computetheamountoftaxableincome,taxliabilityandtaxpayableby/(refundable)toMr.Israr

Razaforthetaxyear 2023 bygivingappropriatenotestosupportyourcalculations.Theaverage

tax rate for the preceding three years was 13%.

Depreciation of a house

756___ Conceptual Approach to Taxes

ANSWER

Name of Taxpayer : Mr. Israr Raza

National Tax Number : XXX

Tax Year Ended on : June 30, 2022

Tax Year : 2023

Personal Status : Individual - Salaried Person

Residential Status : Resident

Salary Income:

Note Rupees

Basic salary (Rs. 300,000 x 9) 2,700,000

Utilities allowance (Rs. 30,000 x 9) 270,000

House rent allowance (Rs. 135,000 x 9) 1,215,000

Conveyance facility (Rs. 2,500,000 x 5% x 9/12) N-1 93,750

Benefit on transfer of car N-2 500,000

Fuel reimbursement N-3 -

Communication allowance (Rs. 5,000 x 9) N-4 45,000

Medical reimbursement N-5 -

Interest free loan from employer N-6 180,000

Waiver of loan on resignation N-7 600,000 5,603,750

Gratuity Gratuity N-8 N-8 - -

Taxable salary income 5,603,750

N-9: Income from Property:

Rent for 12 months [(Rs. 80,000 - Rs. 10,000) x 12] 840,000

Less: Rent not receivable during the year (140,000)

Income from property rent chargeable to tax 700,000

756___ Conceptual Approach to Taxes