Tax Book 2023

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

M/s BHM Associates - Resident AOP

Computation of taxable income and tax liability

For the tax year 2023 Rs.

INCOME FROM BUSINESS

Sales 4,500,000

Cost of sales 2,700,000

Gross profit 1,800,000

Selling and admin expenses 1,520,000

Net profit before tax 280,000

Add:

Interest on capital to Mr. Baqar ( Rs. 1,000,000 x 5% ) 50,000

Commission to Mr. Hadi ( Rs. 4,500,000 x 1% ) 45,000

Gain on sale of fixed assets ( 150,000 - 100,000 ) 50,000

(No depreciation shall be charged in the year of disposal as no

Conceptual Approach to Taxes _____817

Provision for bad debts (6% of sales) 270,000

415,000

Taxable income of AOP 695,000

COMPUTATION OF TAX LIABILITY:

Tax liability under NTR:

Tax on Rs. 695,000 [5% x (695,000 - 600,000)] 4,750

Divisible Income of AOP:

Taxable income under NTR 695,000

Tax on income under NTR 4,750

Divisible income after tax 690,250

Calculation of share of profit from AOP

TOTAL Mr. Baqar Mr. Hadi Mr. Mikdad

Share 3 1 1 1

No turnover tax has been computed as the turnover under NTR of

the AOP is less than Rs. 100 million.

(No depreciation shall be charged in the year of disposal as no

impact on taxable income)

Commission 45,000 - 45,000 -

Interest on capital employed 50,000 50,000 - -

Balance before tax (divided in partners) 600,000 200,000 200,000 200,000

695,000 250,000 245,000 200,000

Computation Of Taxable Income and Tax Liability Of Members:

Mr. Baqar Mr. Hadi Mr. Mikdad

Conceptual Approach to Taxes _____817