Tax Book 2023

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

(ii) Office salaries include Rs.20,000 paid to one of the directors.

(iii) Provident Fund is recognized by the Income Tax Department.

(iv) Vehicle expenses are not vouched and verifiable to the extent of Rs.6,000.

(v) Actual depreciation works out to Rs.136,000 only.

Solution:

M/s Fast Track Company (Pvt) Limited

Computation of taxable income

For the tax year 2023 Rs. Rs.

INCOME FROM BUSINESS U/S 18

Profit as per accounts 326,400

Add:

Income tax 10,400

Provision for taxes 36,000

792___ Conceptual Approach to Taxes

Provision for taxes 36,000

Provision for bad debts 16,000

Unvouched vehicle expenses 6,000

Donation to unapproved institution 1,600

Accounting depreciation 160,000 230,000

Less:

Tax depreciation 136,000

Dividend (excluded to calculate income from business) 8,000 144,000

412,400

INCOME FROM OTHER SOURCES U/S 39

Dividend income (Taxable under FTR) 8,000 -

Taxable income under NTR 412,400

Notes:

1.

Summer - 2009 Q. 3(b)

Cost onissueofdebenture and premiumonissueof debentureexpensesalongwith

casualincome,preimumonissueofdebenturesandrecoveryfromalreadyallowedbad

debts have no impact on taxable income hence the same has been ignored.

Mr.Mr.AliAliHassanHassanaaprofessorprofessorandandIraniIranicitizencitizenenteredenteredintointoananemploymentemploymentcontractcontractwithwithaagovernmentgovernment

universityinPakistanforteachingandresearchwork.Theuniversityisincorporatedu/s 42 ofthe

Companies Ordinance, 1984 as a non-profit organization.

TheemploymentcontractwaseffectivefromNovember01,2022.However,Mr.AliHassanarrived

inPakistanonNovember02,2022.SinceNovember03, 2022 wasSundaythereforehecouldnot

joinhisoffice.OnMondayNovember04, 2022 hebecameillandhadtobehospitalizedforthenext

792___ Conceptual Approach to Taxes