Tax Book 2023

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

Tax paid (1,535,000-1,346,491) = 188,509

Summer - 2008 Q. 4

Rs.

Paid-up capital 21,000,000

Losses carried forward (taxable loss) (155,000)

General reserves -

20,845,000

During the financial year ended 30-06-2023, its books of accounts show the following balances:

i) Raw Material

a Imported value (before custom duty and taxes) 55,000,000

CompanyZaighmChemicals(Pvt)Ltd .wasincorporatedon1stJanuary, 2019 andstarted its

productionandservicesactivitiesfrom15thJanuary2020.Companyhastotal 150 employees.Its

paid-up capital and reserves as on 30-06-2023 were as under:-

800___ Conceptual Approach to Taxes

a Imported value (before custom duty and taxes) 55,000,000

a Local purchases 4,500,000

ii) Other manufacturing / trading expenses 6,500,000

iii) Selling and admin expenses 12,600,000

78,600,000

Additional information:

1) To sell its products, the company's value addition is 30% of the cost of goods sold.

2) Both the raw material and finished goods are subject to following levies:

i) Sales Tax @17 %.

ii) Special Federal Excise Duty @ 1% on imports and goods sold.

iii) Customs duty on import value @ 25%.

iv) Income Tax @ 5.5% on import value plus customs duty and Sales Tax.

5) Utilites bills amounting to Rs.760,000 charged to profit and loss expense include Rs. 86,000 of

withholding income tax and Rs. 134,000 sales tax.

3) Manufacturing expense includes Rs. 5,000,000 on account of depreciation charged on plant and

machinery and Rs. 80,000 charged on computers in selling and administration expenses. The rate

of depreciation charged by company on both types of assets is 25%.

4) A laptop purchased for Rs. 80,000 for use by the Chief Executive was charged to profit and loss

expenses.

6) No opening and closing stocks.

Required:

a) Under what category this company falls for Income Tax purposes?

b) Workout company's sales.

7) Applicable tax depreciation: @15% on machinery and @ 30% on computer and laptop

respectively (ignore initial tax depreciation)

800___ Conceptual Approach to Taxes