Tax Book 2023

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

Employer provident fund contributoin (12%

of Basic pay)

93,600

(78,000) 15,600

Employee's contribution shall not be considered as already included in salary -

Total salary income 1,243,600

CAPITAL GAIN

Gain on sale of Jewellery 45,000

• 45,000

Less: Exempt lower of 1/10th of salary (Rs.780,000 x 0.1) or

Rs.150,000

Loss on sale of an antique shall not be recognized.

(^550) ____ ___ _Conceptual Approach to Taxes

• 45,000

INCOME FROM PROPERTY

Rental Income (Rs.10,000 x 12 months) 120,000

8,600

128,600

(25,720) 102,880

1,391,480

COMPUTATION OF TAX LIABILITY:

Tax on Rs. 1,391,480 [15,000 + 12.5% x (1,391,480 - 1,200,000)] 38,935

Tax on income covered under FTR

Loss on sale of an antique shall not be recognized.

Add: Non-adjustable Advance [Rs.(100,000 - (70,000 / 10 x 2)

/10]

Less: 20% repair allowance

Taxable income under NTR

Tax on income covered under FTR

15% tax on gross dividend of Rs. 12,000 1,800

40,735

Less: Tax paid / deducted under

sections

Salary income 149 (170,000) (170,000)

Balance tax refundable (129,265)

NOTES:

N-1 Loss on sale of antique shall not be recognized.

Q.NO. 3(a): Autumn 2008

Mr.HenryisaUKnationalandprovidesindependentconsultancyservicesinhisindividualcapacity,toUnited

AutosLimited,aPakistanicompany.Mr.Henryhasenteredintoacontractwiththecompany.Thecompany’s

(i) Being a UK national, he will be a non-resident for Pakistan tax purpose;

AutosLimited,aPakistanicompany.Mr.Henryhasenteredintoacontractwiththecompany.Thecompany’s

accountant has treated payment under this contract as being under an employment contract with the company.

(ii) His income from consultancy services provided by him under the contract of employment should be

classified as ‘fees’ for technical services’ and shall be chargeable to tax at 15% of the gross amount of the

consideration received by him;

(iii) No tax was deducted from his remuneration. However, United Autos deposited an amount of Rs.275,000

in the government treasury on his behalf. Mr. Henry believes that tax deposited on Mr. Henry’s behalf does not

attract any additional tax incidence for him as he has not received the amount in cash, from the company.

Mr.HenrystayedinPakistanforeightmonthsduringthetaxyear2023.Duringthesaidperiod,hewasonly

involvedinprovidingin-houseindependentconsultancyservicestodifferentdepartmentsoftheCompany.Mr.

Henry is of the view that:

Solution of Q.NO. 3(a) Autumn 2008

i)MrHenryassumptionthatbeingasUKNationalheisanon-reisdentforPakistantaxpurposesisnotcorrect

astheresidentialstatusisbeingdecidedonnumberofdaysstayinPakistaninsteadofNationalitybase.As

his stay in Pakistan is for 183 days or more hence he is a reisdent for Pakistan tax purposes.

attract any additional tax incidence for him as he has not received the amount in cash, from the company.

(iv) Since his remuneration was agreed to be paid in Pound Sterling, the rate of conversion for tax purpose

shall be the rate applicable on the date of agreement. Any increase in value of Pound Sterling against Pakistan

Rs.should be non-taxable.

BrieflyexplainwhetherornotMr.Henry’sassumptionsin(i)to(iv)aboveareinaccordancewithrelevant

provisions of the ITO, 2001.

(^550) ____ ___ _Conceptual Approach to Taxes