Tax Book 2023

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

Payment of interest to Commercial Bank on house loan 250,000

Charitable Donation: He paid Rs. 50,000 to non-profit organization.

Required:

Solution

Mr. Shakeel - Resident

Computation of taxable income and tax liability

For the tax year 2023

Rs. Rs.

INCOME FROM SALARY

Pay (Rs. 90,000 x 12 months) 1,080,000

House rent allowance (Rs. 40,500 x 12 months) 486,000

Compute taxable income and tax liability of Mr. Shakeel for tax year 2023. Prepare and

present all necessary workings.

Conceptual Approach to Taxes _____813

House rent allowance (Rs. 40,500 x 12 months) 486,000

Utilities (Rs. 9,000 x 12 months) 108,000

Petrol from employer (175 x 50 x 12) (assumed not for offical performance) 105,000

Employee's obligation paid by employer 150,000

Total income 1,929,000

Less deductible allowance for profit on debt u/s 60C - no more available -

Taxable income 1,929,000

COMPUTATION OF TAX LIABILITY:

As there is only salary income hence tax liability for salaried individual in computed as under.

Tax on Rs. 1,929,000 [15,000 + 12.5% x (1,929,000 - 1,200,000)] 106,125

Tax credit on investment in shares and insurance U/S 62

Tax credit is no more available to the taxpayers.

Tax credit on donation U/S 61

Tax credit shall be allowed on lower of:

• Actual amount of donation i.e. Rs. 50,000


• 30% of taxable income i.e. Rs. 578,700

Tax credit = (50,000 x 106,125 / 1,929,000) (2,751)

(2,751)(2,751)

Balance tax payable 108,876

Summer - 2005 Q. 5

Salary income:

Following are the details of income of Mr. A. Rehman for the financial year ended June 30, 2023,

who is employed with a company as Senior Manager.

Conceptual Approach to Taxes _____813