Tax Book 2023

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

Tax on Rs. 7,290,000 [1,330,000 + 35% x (7,290,000 - 6,000,000)] 1,781,500

Less: Proportionate tax on income chargeable to tax under

minimum tax liability (1,781,500 / 7,290,000 x 5,640,000) 1,378,280

403,220

Proportionate tax (as above) (A) 1,378,280

Minimum tax (deductible) (8,500,000 x

10%)

(B) 850,000

Conceptual Approach to Taxes ___ 531

10%)

Higher of (A) or (B) 1,378,280

1,781,500

Less: tax credit on donation

Tax credit shall be allowed on lower

of:

61,094

Tax liability 1,720,406

Tax withheld by clients 200,000

Tax deducted on salaries 390,000

Tax credit = [250,000 x 1,781,500 / 7,290,000]

Less: tax already paid or deducted at source

• Actual amount of donation i.e. Rs. 250,000


• 30% of taxable income i.e. Rs. 2,187,000

Tax deducted on salaries 390,000

9,000

599,000

Balance tax payable 1,121,406

Comments on items not considered in computations

a. Bad debts recovered

Notes

1. Gifts and donation
   Itisassumedthatgiftsaregiveninpersonalcapacity,thereforenotallowedfortaxpurposes.Taxcreditshall
   be allowed on donation to Edhi Foundation.

Tax deducted on fee received as employee

As bad debts of Rs. 750,000 was allowed as expense in tax year 2019 and now this amount has been

recovered, therefore, this amount is chargeable to tax. No treatment is required as this amount has already

been included in revenue.

2. Security deposit on lease


3. Bonus


4. Meeting fee to director

Q.5 (a) Autumn 2012

In May 2023, Hameeda sold certain personal assets at the following prices:

Salary including bonus is chargeable to tax on receipt basis.

be allowed on donation to Edhi Foundation.

As the meeting fee has been recived by the taxpayer as an employee hence the same is taxed as income

under the head salary income instead of taxation under the head income from other sources.

Itisassumedthatsecuritydepositdoesnotformpartoftheleaserentalsandshallberefundedbybankon

repayment of all lease rentals.

Rupees

Plot in DHA Karachi 10,000,000

Paintings 2,000,000

Jewellery 5,000,000

Additional information

(iii) Jewellery costing Rs. 3,000,000 was purchased and gifted to her by her husband in March 2020.

(i)PlotinDHAKarachiwasinheritedbyherfromherfatherinMay2016.ItwaspurchasedbyherfatherforRs.

4,000,000 and market value at the time of inheritance was Rs. 5,000,000.

Required:DiscussthetaxabilityofHameedainrespectoftheabovegains/lossesonsaleofassetsinthe

context of Income Tax Ordinance, 2001.

(ii)PaintingswereinheritedfromhermotherinJuly2022.thesepaintingswerepurchasedbyhermotherfor

Rs. 1,000,000 and market value at the time of inheritance was Rs. 2,350,000.

Conceptual Approach to Taxes ___ 531