Tax Book 2023

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

Amount received to live apart (N-7) 355,000 -

Income before SBI 4,960,000

Less: Zakat (105,000)

Taxable income 4,855,000

Separate Block of Income

capital gain on shares [Rs. (32-28) x 5,000] 20,000

COMPUTATION OF TAX LIABILITY:

securities Date of purchase purchase cost (Rs.) Date of sale Sale proceeds (Rs.)

A 20-Nov-22 500,000 17-Mar-23 400,000

B 5-Aug-22 320,000 8-Jun-23 600,000

C 1-Jun-22 650,000 17-Jun-23 700,000

Conceptual Approach to Taxes ___ 525

Tax on Rs. 4,855,000 [405,000 + 25% x (4,855,000 - 3,600,000)] 726,250

(10,471)

Net tax under NTR 715,779

3,000

Total tax liability 718,779

ASSUMPTIONS / BASIS:

N-1 Gratuity

N-2 Medical allowance

Contributiontoun-recognisedgratuityfundU/C 13 isexemptuptoRs.75,000or50%oftheamountwhichever

is lower.

Less: tax credit on donation to organization was specified in Thirteenth Schedule to

the ITO, 2001) (N-8) 726,250 / 4,855,000 x 70,000

Add tax on capital gain on shares of listed company (Rs. 20,000 x 15% as sold

within one year) as SBI

securities Date of purchase purchase cost (Rs.) Date of sale Sale proceeds (Rs.)

A 20-Nov-22 500,000 17-Mar-23 400,000

B 5-Aug-22 320,000 8-Jun-23 600,000

C 1-Jun-22 650,000 17-Jun-23 700,000

N-2 Medical allowance

It is exempt upto 10% of the basic salary remaining is taxable.

N-3 Travelling

N-4 Provident fund

N-5 Loan from employer

Amount of loan is below Rs. 1,000,000 hence no benefit in the form of mark up has been computed.

N-6 Award

Any benefit given by employer to employee is taxable under the head income from salary like commission

paid to employees.

Itisassumedthatthetravellingallowanceisgivenforbothofficeandpersonaluseso60%ofitisexemptfor

office use.

Itisnotmentionedinquestionwhatisthetypeofprovidentfunditissoitisassumedthattheprovidentfundis

un-recognised provident fund so it is not taxable.

securities Date of purchase purchase cost (Rs.) Date of sale Sale proceeds (Rs.)

A 20-Nov-22 500,000 17-Mar-23 400,000

B 5-Aug-22 320,000 8-Jun-23 600,000

C 1-Jun-22 650,000 17-Jun-23 700,000

paid to employees.

N-7 Agreement to live apart

It is exempt under non-recognition rule.

N-8 Donation

Q.3 Autumn 2013

Nocomparisonwithamountworkedoutat30%oftaxableincomehasbeenmadeastheactualdonation

amount is already less than the same.

(i)AnimmovablepropertywassoldforRs. 50 million.ThecostoftheimmovablepropertywasRs. 25 million.

Tax depreciation of Rs.4 million had been allowed on the immovable property up to the tax year 2022.

Gulzar is a Pakistani resident and operates various businesses. He disposed off the following assets during the

tax year 2023.

securities Date of purchase purchase cost (Rs.) Date of sale Sale proceeds (Rs.)

A 20-Nov-22 500,000 17-Mar-23 400,000

B 5-Aug-22 320,000 8-Jun-23 600,000

C 1-Jun-22 650,000 17-Jun-23 700,000

(iv) Listed securities were sold as follows :

(ii)AcarwasdisposedofforRs.1.2million.Thecarwasacquiredon 1 July2021.Thetaxwrittendownvalue

ofthecaratthebeginningoftaxyear 2023 wasRs.0.9million.Thecarwasbeingusedpartly(70%)for

business purposes. The rate of depreciation for tax purposes is 15%.

Tax depreciation of Rs.4 million had been allowed on the immovable property up to the tax year 2022.

(iii)AnantiquesculpturewaspurchasedforRs.350,000on 30 August2009.ItwassoldforRs.1,500,000an

28 February 2023 throughauction.TheauctioneerwaspaidacommissionofRs.15,000.Taxwasdeducted

and paid by Gulzar from the amount of commission within due date.

securities Date of purchase purchase cost (Rs.) Date of sale Sale proceeds (Rs.)

A 20-Nov-22 500,000 17-Mar-23 400,000

B 5-Aug-22 320,000 8-Jun-23 600,000

C 1-Jun-22 650,000 17-Jun-23 700,000

Conceptual Approach to Taxes ___ 525