Tax Book 2023

Capital Gains Chapter- 12

PRACTICE QUESTIONS WITH SOLUTIONS

Q # 1 An individual has disposed off his shares holding in different companies as per following details:

Company

No of

Shares

Cost of Acquisition

Rupees Per Share

Disposal Consideration Rupees Per

Shares

ABC Limited 10,000 35

55 (sold within 14 months, shares

acquired after 1- 7 - 16 )

XYZ Limited 5,00 0 40

30 (sold after 12 months but before 24

months, shares acquired after 1- 7 - 16 )

MN (Private) Limited 15,000 100 140

HN (Private) Limited 20,000 50 45

PN (Private) Limited 10,000 50 75

Required: Compute the amount of capital gain for the tax year after considering the following information:

1. ABC Limited and XYZ Limited are listed companies.


2. Shares of MN (Private) Limited were disposed after two years of purchases.


3. Shares of PN (Private) Limited were kept by the person for 6 months.

Solution

Capital gain on shares of listed companies (Separate Block of Income):

Rs.
Gain on shares of ABC Limited (10,000 x (55 – 35)) 200,000
Loss on shares of XYZ Limited (5,000 x (30 – 40)) (50,000)
Capital gain 150,000
Tax on above capital gain @ 12. 5 % (Separate block of Income) 18,750

Capital gain on shares of (Private) limited companies:

Rs.
Gain on shares of MN (Private) Limited (15,000 x (140 – 100)) 60 0,000
Loss on shares of HN (Private) Limited (20,000 x (45 – 50)) (100,000)
Gain on shares of PN (Private) Limited (10,000 x (75 – 50)) 250,000
Capital gain 75 0,000

Q # 2 Mr. Z owns different assets the detail of these assets along with mode and value of acquisition and
nature of transaction is as under:

During the year, Mr. Arshad brother of Mr. Z gifted 5,000 shares of M/s ABC (Pvt.) Limited to Mr. Z. Mr.
Arshad purchased these shares at Rs.100 per share. Mr. Z sold these shares for a sum Rs.625,000 as on
15 June, 20 23. The fair market value at the date when gift received was Rs.135.

Mr. Z has also paid a sum of Rs. 40,000 for purchase of a one Kanal plot in EME Society Lahore. Mr. Z has
fortunately succeeded in balloting and has was provided the opportunity to pay the instalments for the
allotment of plot. Mr. Z paid first instalment of Rs.100,000 on January 20 23. However, Mr. Z felt that he
would not be able to pay the further instalments, therefore he sold that plot entitlement to Mr. S for a sum of
Rs. 250,000 on June 27, 20 23.

Mr. Z has also 10,000 shares of XYZ Limited, a listed company, which were transferred to him through
inheritance from father. The face value of these shares is Rs.10 per share and his father was originally
allotted these shares. Mr. Z sold 2,000 shares out of them at Rs.30,000 on January 30, 20 23. The price
ruling in the market on the date of sale was Rs. 20 per share.

Mr. Z also has a habit of collection of postage stamps. His collection includes 2,000 stamps countries and
occasion. He collected these stamps in many years. The cost of these stamps aggregates to Rs.275,000.
However, due to paucity of space in the home, he is not able to continue this habit therefore he sold these
stamps for sum of Rs.500,000 in a stamp exhibition.

You are required to compute taxable income of Mr. Z for tax year 20 23.