Tax Book 2023

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

(v)

(vi)

Q.NO.4 March 2015

Rupees

Mr.HassanhasbeenworkingasanAccountsExecutiveinPrimeLimitedwhichisapubliclimited

company.In additiontohissalary,otherperksandallowancesarealsoprovidedtohimbyhis

employer.Hehasvariousothersourcesofincomeaswell.Assumeyouareincometaxconsultant

andMr.HassanhassubmittedthefollowinginformationforthetaxyearendedonJune30, 2023

for calculation of is taxable income and tax liability:

Theoptionofgrouptaxationshallbeavailabletothosegroupcompanieswhichcomply

with such corporate governance requirements and group designation rules or

regulations as may be specified by Securities Exchange Commission of Pakistan

(SECP) fromtime totimeand aredesignated ascompanies entitled toavailgroup

taxation.

GrouptaxationmayberegulatedthroughrulesasmaybemadebytheFederalBoardof

Revenue.

772___ Conceptual Approach to Taxes

Rupees

Basic salary per annum 500,000

Perquisites and allowances paid by the employer:

House rent allowance 110,000

Utilities 25,700

Entertainment allowance 13,000

Reimbursement of medical expenses 7,750

Income from other sources:

Other information:

·        Heisalsoanon-professionalwriterandhasreceivedRs.20,000onaccountofhisliterary

work which was starter and completed during the year.

·        Mr.HassanpaidannualpremiumofRs.12,000forlifeinsurancepolicyandRs.4,000for

health insurance policy.

·         He also paid donation of Rs, 15,000 to an approved charity organization.

·         He also paid Zakat of Rs. 10,000 under the Zakat and Usher Ordinance, 1980.

TwocarshavebeenprovidedtoMr.Hassanandmaintainedbythecompany.Onecarisused

whollyforthecompany’sbusinesspurposeshavingcostofRs.300,000andtheotheroneisused

for his family exclusively costing to Rs. 350,000.

·        Mr.HassanhasbeenmaintainingaprofitandlosssharingaccountinITCbank.Thebank

has credited a profit of Rs. 11,300 in his account during tax year.

Required:

Solution

Name of Tax Payer : Mr. Hassan

Calculatethetaxable income andtaxliabilityofMr.Hassan forthetaxyear 2023.Provide all

necessary notes to support your calculations.

772___ Conceptual Approach to Taxes