Tax Book 2023

Chapter 30 Solved Past Papers Income Tax Numericals of ICMAP Stage IV - (2003 to 2018)

3 -12,000,000

4 -3,000,000

5 1,000,000

6,000,000

1 Total sales include sales of Rs. 20 million which are subject to 4% minimum taxation.

2 Cost of sales includes accounting depreciation of Rs. 4 million.

3 The following expenses are also included in the general and administrative expenses:

a. Accounting depreciation of Rs. 2 million.

b. Bonus paid to the employees Rs. 3 million.

c. Provision for doubtful receivables Rs. 1.5 million.

d. Provision for the post employment benefits Rs. 2 million.

e. Fines and penalties paid to Federal Board of Revenue (FBR) Rs. 0.7 million.

4

5 Other income includes the following items:

a. Accounting gain on disposal of fixed assets Rs. 0.2 million.

b. Interest income Rs. 0.3 million.

c. Dividend income from listed securities Rs. 0.5 million.

Net Profit

Sellingexpensesincludecommissionexpenseof Rs.1.5million. However,taxhasnot

been withheld while making the payment of the commission.

Less: General and admin expenses

Less: Selling expenses

Add: Other Income

774___ Conceptual Approach to Taxes

c. Dividend income from listed securities Rs. 0.5 million.

Additional Information:

6 Tax depreciation is Rs. 10 million.

7 Bad debts of Rs. 0.5 million.

8 Gratuity paid amounting Rs. 1.7 million.

9 Taxable gain on disposal of fixed asset is Rs. 0.15 million.

10 Breakup of advance tax is as follows:

a. On supplies u/s 153 Rs. 0.7 million.

b. Tax on utilities Rs. 0.3 million.

c. Tax on dividend income Rs. 0.75 million.

d. Tax on interest income Rs. 0.03 million.

Required:

Solution

Prime Leather Works (Pvt.) Limited

Resident : Private Company

Tax Year: 2023

Computation of taxable income and tax thereon

Rupees Rupees

Income from Business

Calculate taxable income and net tax liability of Prime Leather Works (Pvt.)Limitedfortax

year 2023.

Income from Business

Net Profit before tax 6,000,000

Add: Inadmissible items

Accounting Depreciation in cost of sales 4,000,000

Accounting Depreciation in admin exp. 2,000,000

Provision for doubtful receivable 1,500,000

Provision for post employment benefits 2,000,000

Fines and penalties 700,000

774___ Conceptual Approach to Taxes