Tax Book 2023

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

iv)ThepresumptionofMr.Henryisagainnotcorrectastheconversionratetotheremunerationinpound

sterling shall be the date at which the amount received by Mr. Henry and not the date of agreement.

iii) Tax paid by the company on behalf of Mr. Henry shall be treated as income and tax on the same is to be

paid by Mr. Henry on the same basis as given in Note 2 above.

ii)AsMr.Henryisprovidingindependentconsultancyservicestovariousdepartmentsoflocalcompanyand

thesameshallnotbetreatedunderthetermemploymenthenceacontractofservicesshallbetreatedas

servicecontractandhigherofminimumtaxattherateof10%ortaxundernormaltaxregimeontaxableprofit,

if any, is to be paid by Mr. Henry.

Conceptual Approach to Taxes ___ 551

Q.NO.1 Spring 2008

Rs. ‘000’

Sales (including rental income) 76,000

Cost of sales 53,000

Gross profit 23,000

Selling, administrative and other expenses 16,250

Profit before tax 6,750

Tax deducted at source on import of raw material 900

Tax deducted at source on sale of goods 3,375

Saleem,RashidandMoinarepartnersinapartnershipconcerncarryingonthebusinessofmanufacturingand

saleofconsumergoods.Theyshareprofitandlossintheratio2:3:5respectively.Theresultsofoperationsof

the firm are as follows:

Other information:

(v) Mr. Moin has no other source of income.

Required:

Assumingthattheabovedatapertainstothetaxyear2023,computethetaxliabilityofthefirmandtaxable

(ii) Mr. Saleem has earned income of Rs. 325,000 from another business as a sole proprietor. He also sold

his personal car for a loss of Rs. 50,000.

(iii) Mr. Rashid earned a gross income of Rs. 200,000 from another partnership firm where he is entitled to

25% of the total profit of the firm. He also earned dividend of Rs. 50,000 from a listed company.

(i) The firm has rented out a vacant portion of its factory to a company at an annual rental of Rs.1 million.

Tax was duly deducted by the lessee.

Solution of Q.NO.1 Spring 2008

Rupees Rupees

INCOME FROM BUSINESS

Net profit before tax (Rs. 6,750,000 - 5,750,000

Assumingthattheabovedatapertainstothetaxyear2023,computethetaxliabilityofthefirmandtaxable

income of each of its partners.

Name of Taxpayer : AOP

National Tax Number :

Income year ended : June 30, 2023

Tax Year : 2023

Personal Status : AOP

COMPUTATION OF TAXABLE INCOME:

Net profit before tax (Rs. 6,750,000 -

1,000,000 income from property)

5,750,000

Property Income 1,000,000

(200,000)

Rent chargeable to tax as SBI 800,000

Taxable income under NTR 6,550,000

COMPUTATION OF TAX LIABILITY:

Tax on Rs. 6,550,000 [Rs.1,330,000 +

35% (Rs. 6,550,000 - 6,000,000)]

1,872,500

In the absence of information it has been assumed that the sale

of the AOP is wholly to the persons that have deducted

withholding tax at source. Hence the income of the firm is fully

covered under Minimum tax Regime.

Less: 20% repair allowance

Conceptual Approach to Taxes ___ 551