ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD

(Department of Commerce)
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Course: Business Taxation (456)

Level: BA/B.Com Semester: Spring, 2019
Total Marks: 100 Pass Marks: 40
Note: You are required to solve all questions. If you are unable to understand any
question of assignment, do seek help from your concerned tutor. But keep in mind
that tutors are not supposed to solve the assignment questions for you.
ASSIGNMENT No. 1
(Units 1-4)
Q.1 Understanding the legal terms in taxation provides a way forward for determining
the tax liability of a person. Keeping this in view, define the following terms with
reference to Income Tax Ordinance 2001: (20)
a) Taxpayer b) Person c) Turnover
d) Tax Year e) Public Company f) Resident Person
g) Intangible h) Permanent Establishment
Q.2 The Income Tax Ordinance 2001 divides income into five major head: salary,
property, business, capital gains and other sources. Explain the components of
salary income & their taxation treatment as per the provisions of the Income Tax
Ordinance 2001. (20)
Q.3 Calculate the tax liability of Mr. Sahir, a salaried person, from the following
records: (20)
(Tax rates are given at the end).

No. Item Amount (Rs.)

1. Basic Salary 40,000 per month
2. House rent allowance 15,000 per month
3. Overtime 30,000 per year
4. Medical allowance 4,000 per year
Conveyance facility is provided to Mr. Waqar for personal
5. Cost of vehicle is 900,000
and official use.
6. Reimbursement of medical expenses 8,000 per year
7. Contribution to provident fund 6,000 per year
8. Zakat paid 2,000 per year
9. Shares of BC Ltd. purchased Rs. 19,000 (total)
10. Donation to a hospital Rs. 12,000 (annual)

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Q.4 Suppose you are running a food processing business. The FBR send you a notice to
pay your tax liability. Under the Income Tax ordinance 2001, how would you
estimate your income from business on which the tax will be payable? (20)

Q.5 What is an income tax return? Who is required to file the income tax return? What
are the requirements of a valid return of income? Also, write down the penalty for
non-filing of the income tax return. (20)

ASSIGNMENT No. 2
(Units 5-9)
Total Marks: 100 Pass Marks: 40

Q.1 To implement the Income Tax Ordinance 2001, the Federal Government has
established the institution of Federal Board of Revenue (FBR). Discuss in detail the
powers and functions of the FBR in the light of the provisions of the Income Tax
ordinance 2001. (20)

Q.2 At present many types of withholding taxes and advance taxes are deducted on
various types of transactions. Discuss in detail the concepts of withholding tax and
the advance tax under the provisions of the Income Tax Ordinance 2001. (20)

Q.3 In case of dispute between a taxpayer and the FBR, the taxpayer can go the court.
In this context, explain the various appealable orders under the Income Tax
Ordinance 2001. What are the various appellate authorities under the Income Tax
Ordinance 2001? Explain in detail. (20)

Q.4 The sales tax is applied on the retail price of different goods and services and is
generally written on the pack of the particular product. In this regard, you are
required to explain the following concepts under the Sales Tax Act 1990: (20)

a. Registration of the taxpayers

b. Types of sales tax Return
c. Audit under sales tax
d. Input and Output tax
e. Taxable and Zero rated supply

Q.5 From the following information, calculate taxable income and tax payable by Mr.
Ijaz, a mobile trader. (Tax rates are given at the end) (20)

No. Income Amount

1. Sales in business 15,00,000
2. Cost of sales 550,000
3. Depreciation & amortization expenses 30,000
4. Financial expenses 45,000
5. Salaries & wages 35,000

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 6. Capital gains on sale of shares of a private company after 1 year of 80,000
purchase
7. Income from property 100,000
8. Zakat paid 5,000
9. Donation to a school 11,000

Tax Year 2017-18

Tax Rates for Individuals

S. No. Taxable Income Rate of Tax

Where the taxable income does not
1. 0%
exceed Rs. 400,000
Where the taxable income exceeds Rs.
2. Rs. 1,000
400,000 but does not exceed Rs. 800,000
Where the taxable income exceeds
3. Rs. 800,000 but does not exceed Rs. 2000
Rs. 12,00,000
Where the taxable income exceeds
5% of the amount exceeding Rs.
4. Rs. 12,00,000 but does not exceed
12,00,000
Rs. 2,400,000
Where the taxable income exceeds
Rs. 60,000 + 10% of the amount
5. Rs. 2,400,000 but does not exceed
exceeding Rs. 24,00,000
Rs. 4,800,000
Where the taxable income exceeds Rs. 300,000 + 15% of the amount
6.
Rs. 48,00,000 exceeding 48,00,000

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