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Q1. Hasan, aged 62, works at a HEC recognized research laboratory at a monthly salary of 70,000.
The laboratory disburses payroll to its employees on the last day of the month in which the
employee has worked. The laboratory runs an approved provident fund where employees are
required to pay 12% of their salary, and the laboratory matches employee contribution in the fund.
Hasan is also entitled to the following allowances and benefits:
b. A car costing Rs. 600,000 for both official and personal use.
d. Monthly medical college fee of Hasan’s son amounting to Rs. 25,000, and
e. Monthly subscription of Golf Club for Hasan and his family amounting to Rs. 5,500 per month.
Hasan pays Rs. 4,000 per month for the riding club membership of his family. In November 2019, the
laboratory spent Rs. 120,000 on providing training to Hasan on the new centrifuge machine recently
installed at the laboratory. In May 2020, Hasan bought shares costing Rs. 1,500,000 at an IPO.
Hasan owns a shop that is given on a monthly rent of Rs. 180,000 since 2015. Rent is received on a
monthly basis at start of the month. In January 2020, Hasan had to incur Rs. 600,000 on renovation
of the shop.
Required: Calculate Income Tax Liability for Hasan for the Tax year 2020
(i) An apartment was rented to Abdul Qadir at a monthly rent of Rs. 40,000. Zahid received
a non-adjustable security deposit of Rs. 300,000 which was partly used to repay the non-
adjustable security deposit amounting to Rs. 175,000 received from the previous tenant
in July 2014. He also spent Rs. 20,000 on repairs of the apartment in February 2020.
(ii) Under an employee share scheme, 30,000 shares of Dawood Limited were issued to
Qamar, on 1 August 2016 for Rs. 30 each. According to the scheme, he was not allowed
to sell/transfer the shares before completion of three years from the date of issue. The
face value of each share is Rs. 10 per share. Fair market value of each share on different
dates was as follows:
(a) 1 August 2016 Rs. 40
(b) 30 June 2019 Rs. 30
(c) 31 July 2019 Rs. 50
(d) He sold 10,000 shares on 31 May 2020 for Rs. 65 per share
Required: Calculate Taxable Income or loss and Income Tax Liability for Hasan for the Tax year
2020
Q3.Mr. Asad is working as a Senior Executive in DD Pakistan Ltd. The details of his income/receipts d
uring the tax year 2020 are as follows:
(i) He received basic salary of Rs. 65,000 per month.
(ii)He was provided with accommodation for which DD Pakistan Limited paid a rent of Rs. 25,000 per
month.
(iii)A company owned car was provided to him which was used partly for official and partly for privat
e purposes. The car was purchased at a cost of Rs. 1,500,000 but had a fair market value of Rs. 1,520
,000.
(iv)Medical allowance of Rs. 150,000 was paid to him during the year. The actual medical expenses i
ncurred by him amounted to Rs. 40,000.
(v)Provident fund was deducted @ 12% of his basic salary. An equal amount was contributed by the
company.
(vi)Tax deducted by the company amounted to Rs. 170,000.
(a) An apartment was rented to Abdul Qadir at a monthly rent of Rs. 40,000. Zahid received a non-
adjustable security deposit of Rs. 300,000 which was partly used to repay the non-adjustable
security deposit amounting to Rs. 175,000 received from the previous tenant in July 2014. He also
spent Rs. 20,000 on repairs of the apartment in February 2020.
(b) A bungalow was rented to a bank. Asad and his younger brother are joint owners of the
bungalow in the ratio of 60:40 respectively. The annual rent agreed with the bank was Rs. 6,000,000
which is inclusive of Rs. 100,000 per month for utilities, cleaning and security. Asad paid Rs. 35,000
per month for providing these services.
Requirement: Compute his taxable income, total tax liability and tax payable.