Tax Book 2023

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

N-4: Communication Allowance:

This allowance is taxable and has been included in salary income.

N-5: Medical Reimbursement:

Reimbursement of medical expenses as per terms of employment is exempt from tax.

N-6: Interest Free Loan:

(Rs. 2,400,000 x 10%) x 9/12 = Rs. 180,000

N-7: Waiver of Part of Loan:

(Rs. 2,400,000 x 25%) = Rs. 600,000

N-8: Gratuity:

Rupees

Gratuity 2,200,000

The loan of Rs. 2,400,000 is kept for 9 months so the interest shall be computed for the same

period. The amount to be included in salary income shall be as below:

Waiverofpartofloanistreatedasabenefittoemployeefromemployerandisincludedinthe

salary income. Amount of loan waived is as follows:

758___ Conceptual Approach to Taxes

Gratuity 2,200,000

Less: Exempt

(Lessor of Rs. 75,000 or 50% of amount received) 75,000

Taxable at 13% average rate of last three years 2,125,000

N-9: Income from Property:

Rupees

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

N-10: Income from property is taxable under NTR.

N-11: Compensation under the Redundancy Scheme:

It is presumedthat amount of Rs.10,000per monthrecovered fromDigital Ltd. Was actually

incurredbyMr.Israronprovidingtheservicesofaservant,hence,nothingistaxableasincome

from other sources.

Profitpaidtoa bankona loanforreconstructionofa portionof the houseshallhavenotax

treatmentasthesamehasbeenomittedbyFinanceAct, 2022 thatwasavailableundersection

60C of the Income Tax Ordinance, 2001.

Compensationundertheredundancyschemeshallbetaxableasaseparateblockofincomeatthe

average rate of tax (ART) for the last three years, which under this case is 13%.

Q. NO. 2 FALL 2016

SunshineEnterprises(SE)isanAssociationofPersons,runningitsbusinessinPakistan.SEhas

Pakistanaswellasforeign sourceincomesincludingincome fromspeculation/non-speculation

businesses,capitalgainandothersourcesetc.Followingarethedetailsofitsincomeforthetax

year 2023:

average rate of tax (ART) for the last three years, which under this case is 13%.

758___ Conceptual Approach to Taxes