Tax Book 2023

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

Studio Income 990,000

Inadmissible expense 216,000

Gain on sale of studio 800,000 2,006,000

Income from other sources

Loan received from father 2,500,000

Literary work as an author 1,200,000

Winning a car 850,000 4,550,000

Total Income 16,726,500

Less: Winning a car covered under FTR (Note 1) (850,000)

Conceptual Approach to Taxes ___ 521

Less: Winning a car covered under FTR (Note 1) (850,000)

Taxable Income 15,876,500

Computation of Tax Liability

Tax on Rs. 15,876,500

[1,330,000 + (15,876,500 - 6,000,000) x 35%] 4,786,775

Less: tax credit on donation 4,786,775 / 15,876,500 x 100,000 (30,150)

Less: tax credit on contribution to APF 4,786,775 / 15,876,500 x 500,000 (150,750)

Balance tax payable 4,605,875

As the taxable salary income does not exceeds 75% of taxable income, therefore the tax rates of a non

salaried individual will apply.

(Note 1) In the absence of information it has been assumed that tax on winning a car has already been

deducted and paid therefore the same has not been accounted for in the above computation of tax liability.

(Note 2) Minimum tax u/s 113 has not been computed as the is not applicable on the taxpayer.

Q. NO. 1 Spring 2014

Rs. in '000' Rs. in '000'

Sales of manufactured motors 45,000

Less: Cost of sales and administrative expenses

(excluding depreciation for the year)

Income before depreciation 12,000

Less: Tax depreciation for the year (9,000)

(33,000)

Qamarisengagedinthebusinessofmanufacturingandrepairofelectricmotors.Hisaccountanthasprepared

the following tax computation for the tax year 2023:

Less: Tax depreciation for the year (9,000)

3,000

Less: Brought forward business loss from tax year 2017

(Total business loss was Rs. 4 million)

Business income after adjusting business loss -

Add: Interest income received from a commercial bank 500

Income form other sources 850 1,350

Taxable income 1,350

Computation of tax

Tax liability 125

Less: Tax deducted by bank on interest income (500,000 x 15%) (70)

Following expenses are included in the cost of sales and administrative expenses:

100

(3,000)

Travelling expenses include travel and hotel expenses of 100

Electricity charges paid for Qamar's residence 150

Damages paid to a distributor for delayed supplies 200

Zakat paid under Zakat & Ushar Ordinance 300

Salary paid to Bari who is Qamar's brother.

Unabsorbed depreciation brought forward from previous tax year 500

Required:

Fine paid to the Ministry of Environment for infringment of

environmental and safety laws

Travelling expenses include travel and hotel expenses of

Qamar's visit to Malaysia for attending a trade fair

720

200

Qamar is not satisfied with the tax return prepared by his accountant and has requested you to review the

return.

(a) Compute the revised taxable income of Qamar and tax payable by or refundable to him for the tax year

2023.

Conceptual Approach to Taxes ___ 521