Tax Book 2023

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

(iv) Salaries and wages include payment of Rs. 250,000 without deducting tax at source.

(v) Salary paid amounting to Rs. 240,000 in cash.

(viii) Pre-paid insurance Rs. 250,000.

Required: Compute the taxable income and tax liability of the Company for the tax year 2023.

Solution:

M/s Arshad Limited

(vi) Donation Rs. 500,000 paid to an approved institution specified in 13th Schedule of the ITO,

2001.

(vii) Donation Rs. 400,000 paid to an approved institution but not specified in 13th Schedule to the

ITO, 2001.

790___ Conceptual Approach to Taxes

M/s Arshad Limited

Computation of taxable income and tax liabiltiy:

For the Tax year 2023

Rs. Rs.

INCOME FROM BUSINESS (000) (000)

Profit as per accounts 129,100

Add: Inadmissible items:

Accounting depreciation 58,000

Income tax for last year 54,000

Doubtful debts 5,000

Donation to approved institution (credit shall be allowed) 400

Donation to approved institution (under clause 61) 500

Provision for taxation 79,000

900

Unvouched and un-detailed expenses 350

490

Pre-paid insurance 250

198,890

Payment of salaries without tax deduction & cash payment (Rs.250,000

+ 240,000)

Bad debts recovered from allowed portion (assumed credited to liability

otherwises the same shall be ignored for taxable income comuptation as

already included in given accounting profit)

198,890

Less: Admissible items 327,990

Tax depreciation (66,000)

Total & taxable income 261,990

COMPUTATION OF TAX LIABILITY:

Alternative Corporate tax U/S 113C (A) 21,947

790___ Conceptual Approach to Taxes