Tax Book 2023

Chapter 21 ___Solved Past Papers Income Tax Numericals of CA Module C - (2001 to 2022)

1/5th repair allowance (408,800)

Property tax (15,000)

Profit on debt for renovation of rented house (200,000)

Insurance premium (110,000)

(60,000) (793,800)

Taxable Income 1,250,200

W-1

Working for Unadjustable advance

Less: Deductions u/s 15A

Lower of actual collection & admin charges or 4% of

rent chargeable to tax

Conceptual Approach to Taxes ___ 519

Working for Unadjustable advance

[800,000 - ( 400,000 / 10 x 4 ) ] / 10 64,000

Q.NO.6 Spring 2015

Following information is available in respect of his business operations for tax year 2023:

LHR PAR BER

----- Rs. in million --

Income / (loss) from business 29 40 -15

Advance taxes paid in respective countries

during the year

10 5 3

Income from capital gain (net of income tax - 27 -

Aslamis a residenttaxpayerwho operateshisbusiness from Lahore (LHR)and Paris(PAR).In

August 2022, he established a new branch in Berlin (BER).

Income from capital gain (net of income tax

of Rs. 3 million)

• 27 -
  Carried forward losses:
  Loss from business - 55 -
  Capital loss - 6 -

The following amounts paid by Aslam in respect of BER have been charged to LHR:

(i) salaries for the first three months amounting to Rs. 5 million.

(ii) rent expense for the year amounting to Rs. 7 million.

Required:

Solution:

UndertheprovisionsoftheIncomeTaxOrdinance, 2001 calculatethetaxpayablebyAslaminthetax

year 2023 and foreign tax losses to be carried forward to next year, if any.

Mr. Aslam

Tax Year 2023

Computation of taxable income and tax thereon

LHR PAR BER

Rs. In million Rs. In million Rs. In million

Income / Loss 29 40 (15)

Add / (Less): salaries wrongly charged 5 - (5)

Rent wrongly charged 7 - (7)

41 40 (27)

Income From Business 41 40 (27)

• (40)
  (A) 41 - (27)
  Income from Capital Gain - 30 -

Less: Adjustment against loss from

Business b/f (55-40)= 15 c/f

Income from Capital Gain - 30 -

Set-off Capital Loss - (6) -

(B) - 24 -

Total Income [A + B] 41 24 (27)

Total Taxable Income 41 24 (27)

COMPUTATION OF TAX LIABILITY: Rs. In million

Tax on Rs. 65,000,000

[1,330,000 + (65,000,000 - 6,000,000) x 35%] = 21,870,000 22

(3)

19

Less tax credit for foreign source capital gain (Lower of Pakistan

average tax OR Foreign tax paid)

The un-adjusted business loss of PAR of Rs. 15 million and Ber of Rs. 27 million shall be carried forward for

adjustment against foreign source business income of six succeeding tax years.

Conceptual Approach to Taxes ___ 519