Tax Book 2023

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

(net of 12% taxes withheld)

· Lecturing and examination services fees from professional institutes 18,000

(net of 10% tax withheld)

· Birthday present cash bonds 50,000

(iv) Gain on sale of shares of KayToo Ltd., a public listed company 55,000

Solution

Mr. Jamshaid

Computation of taxable income and tax liability:

For the tax year 2023

Rs. Rs.

INCOME FROM SALARY

Required: As a tax consultant you are required to compute Mr. Jamshaid’s total income and his

income tax liability for the tax year 2023.

Conceptual Approach to Taxes _____795

INCOME FROM SALARY

Basic salary (Rs. 20,000 x 12 months) 240,000

House rent allowance (Rs. 8,000 x 12 months) 96,000

Utility allowance (Rs. 1,000 x 12 months) 12,000

Medical allowance (Rs. 1,000 x 12 months) 12,000

24,000 -

Expenses on children books (reimbursed by employer) 4,800

Conveyance (650,000 x 5%) U/R 5 of Income tax Rules, 2002 32,500

• Gratuity received 70,000
  Less: Exempt under clause 22 of Part I of 2nd Schedule lower of:


• Rs. 75,000


• 50% of amount receivable i.e. 35,000 35,000 35,000
  420,300
  INCOME FROM PROPERTY U/S 15

Rent from house (Rs. 10,000 x 12 months) 120,000

Add: unadjustable advance [(200,000 - (100,000 x 3) /10)] /10 17,000

137,000

Less: Exempt upto 10% of basic salary U/C 139 of Part

1 of 2nd schedule

Interest free loan (not included in taxable income as

loan does not exceed Rs. 1,000,000)

Rent chargeable to tax

(27,400)

• Ground rent (10,000)


• Property tax (15,000)


• Rent-sharing with FBFC 3,000 per month (36,000)


• Admin & collection charges (4% of rent chargeable to tax) (5,480)
  (93,880) 43,120

INCOME FROM OTHER SOURCES U/S 39

Less: 20% repair allowance

Conceptual Approach to Taxes _____795