Tax Book 2023

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

3,069

298

6,500

6,500

9,569

4,000

6,500

Total tax 10,500

20,069

Notes

N-1 House rent allowance, utility allowance, conveyance allowance are fully taxable.

N-2

N-3

(Rs.3,367 / 734,667) x 65,000 =

Minimum tax on fee as visiting

facaulty (B)

10% x 65,000=

Add Higher of (A) OR (B)

Proportionate tax on visiting faculty fee (A)

Medicalexpensesreimbursedbytheemployerareexemptfromtax.[(Clause(139)of

Part-1 of Second Schedule]

Entertainment allowance as reduced by the actual expenditures for the purpose of

employer's business is taxable.

Tax deducted from salary by ICR Private Limited

Tax on honorarium received from institute (Rs.65,000)

Balance tax payable

Tax already paid:

762___ Conceptual Approach to Taxes

N-4 Gratuity 130,000

Lesser of 75,000 or 50% of the amount received (65,000)

65,000

N-5 Provident fund of ICR

Employer Contribution to Provident fund in ICR (Rs.5,000/2) x 9 22,500

(36,000)

Nil

N-6 Total capital Gain 30,000

Taxable amount 30,000

Q. NO. 2 WINTER 2016

Rs.

Sales 1,750,000

Less: Cost of sales (1,225,000)

Less: Exempt upto lesser of 10% of salary (360,000 x

10%) or 150,000

Starlight Limited(SL)isanunlistedpubliccompany engaged inthemanufacturing andsupplyof

chemicals ofdifferent brands. The company also imports chemicals from vendors out of

which majority belonged to European countries. The company imports certainchemicals in a

finishedformindrums of 500 literseach, which arethen packed locally inbottlesof 5 and10

liters each for onward sale to customers in Pakistan.

Assume following is the extract from the profit or loss account of SL for the period ended

June 30, 2023:

employer's business is taxable.

Less: Cost of sales (1,225,000)

Gross profit 525,000

Less: (180,000)

Financial Charges (125,500)

Other Charges (31,250)

188,250

Add: Other Income 35,200

Profit Before Tax 223,450

Administrative and selling expenses

762___ Conceptual Approach to Taxes