Tax Book 2023

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

(b) Tax Liability:

Notes Rs. '000'

Tax on taxable income (167,294 x 29%) 48,515

Less: Tax credit for donations N-4 2,900

Tax credit for investment in plant & machinery N-9 - (2,900)

Tax under NTR N-10 45,615

N-6 800

Total tax for the year 46,415

Less: Tax already paid/ deducted:

Advance Tax u/s 147 6,200

Tax on foreign-source consultancy income (80,000 x

1%) covered under FTR

N-12 Reconstruction of a car parking is a structural improvement is not eligible for tax

depreciationand also not allowedasstraight deductionasexpenditure. Hencethe amountof

Rs.500,000isaddedback.Thecostofreconstructionofacarparkstructuralimprovementisalso

not eligible for initial allowance.

766___ Conceptual Approach to Taxes

Advance Tax u/s 147 6,200

Tax paid on import of raw material 68

Tax paid on import of plant and machinery 1,890

Tax deducted by banks 1,120 (9,278)

Balance tax payable 37,137

(c) Further Tax Liability for Short Payment of Advance Tax:

Rs.'000'

45,615

According tosection 147(4A) oftheincome taxordinance, 2001, itismandatory onsucha

taxpayerwhoisrequiredtopayadvancetaxtoestimatetheamountoftaxpayablebyitforthe

relevanttaxyear.Thisestimateshallbepreparedatanytimebeforethelastinstallmentisdue.The

taxpayershallfiletheestimatetotheCommissioner,ifthetaxpayableislikelytobemorethanthe

taxforthelatesttaxyear.Advancetaxunderthiscaseshallbepaidonthebasisoftheestimate

filed to the Commissioner.

Section205(1B)oftheIncomeTaxOrdinancerequiresthatwhereadvancetaxpaidu/s 147 isless

than90%ofestimatedamountoftaxfortheyear,asdetermined u/s147(4A),thepersonshallbe

liabletopaydefaultsurcharge@12%perannumoftheamountbywhichthetaxpaidfallsshortof

90%.TheamountofdefaultsurchargeshallbecomputedfromfirstdayofApriltotheThirtiethday

ofJuneinthatyeartothedateofwhichassessmentismadeorthethirtiethdayofJuneofthe

financial yearnextfollowing,whicheveristheearlier. Amountof defaultsurcharge payableby

Starlight Limited is computed as below:

Tax for the year under NTR 45,615

41,054

6,200

68

320

1,890 8,478

32,576

2,932

Tax deducted by banks on Profit on debt (excluding on export of

services covered under FTR)

90% of the tax estimated (45,615 x 90%)

Tax for the year under NTR

Less: Tax paid in advance or deducted at

Tax on import of raw material

Tax on import of plant and machinery

Short payment of advance tax

Default surcharge (32,576 x 12%) x 9/12 (nine months from 01-4-

766___ Conceptual Approach to Taxes