FIN623 Assignment # 1 Solution

FIN623 Assignment # 2 Solution

FIN623 Assignment # 2 Solution:

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FIN623 Paper

FIN623 - Taxation Management


Start Time: 10:00 to 11:00 28-05-2010

Total Question: 32 Marks 44

Total MCQS: 28 Marks 28

Total Long Question: 4 Marks 16

Question 1: What is the Tax treatement of Agriculture Produce to use in the Business of Cultivator? Marks 3

Question 2: Define the Following terms with the Section? (1) Employee (2) Employer (3) Salary Marks 3

Question 3: Mr. Ali is Residuent of Pakistan and working Uk. The Mr. Ali pay the tax in his Salary in UK. What will be the treatement in Pakistan with the Section? Marks 5

Question 4: Explain the Individual in the which ordianace with Section? Marks 5

FIN623

THE ONE YOU HAVE WAS ALSO MADE BY ME AND NOW SEE THIS I HAVE DONE SOME AMENDMENTS BECAUSE A KIND FRIEND DRAW MY ATTENTION TO THE SEC 21 REGARDING DEDUCTIONS SO I CHANGED IT A BIT NOW I HAVE MADE THIS ONE PLEASE SEE AND COMMENT AND DO REPLY I HAVE NOT YET POSTED OK.
Tax Payer: National Co ltd

Residential Status: Resident Company

Revenue Account as Submitted by Co.
Tax Year: 2009

NTN: 00000
Administration Expenses

1,372,000.00
Gross Profit
4,602,000.00
Rents and rates
87,000.00
Dividend
47,500.00
Auditor’s Fee
34,000.00
Bad debts recovered
4,000.00
Bad debts
11,000.00
Income tax refund
14,000.00
Contribution to Provident Fund
72,800.00
Depreciation
190,000.00
Fire insurance premium
48,000.00
Interest on long-term loans
247,500.00
Legal charges
93,700.00
Reserve for taxation
393,000.00
Stationary expenses
40,000.00
Underwriting commission
14,500.00
Vehicles repairs & maintenance
188,200.00
Net profit
1,875,800.00
4,667,500.00
4,667,500.00
Computation of tax payable
Net profit as computed by company
1,875,800.00
Bad debts recovered allowed
(4,000.00)
Custom duty paid
(36,000.00)
Contribution to Provident Fund
(72,800.00)
Additions by Taxation Officer on account of inadmissible expenses:
Depreciation
190,000.00
Legal charges
93,700.00
Bad debts unaccepted (11000-8000)
3,000.00
Taxable income
2,049,700.00
tax payable . 35%
717,395.00
If any one have the solution or have done part of it please share so we can discuss further. i have received a bit of solution from previous mail thread but i have still doubts though person posting also was not sure, here it is:

Tax Payer:National Co ltd
Resident Company
Revenue Account as Submitted by Co.Tax Year: 2009
NTN: 00000
Computation of tax payable
Net profit as computed by company 1,875,800.00
Less income tax refund (14,000.00)
Bad debts recovered allowed (4,000.00)
Custom duty paid (36,000.00)
Contribution to Provident Fund (72,800.00)
Additions by Taxation Officer on account of inadmissible expenses:
Depreciation 190,000.00
Legal charges 93,700.00
Bad debts accepted 8,000.00
taxible income 2,040,700.00
tax payable =2040700*0.35 714,245.00

FIN623

1.according to capital gain sec.37 buying and selling of vehicles and earning the profit after this process this profit is will not be treated as capital gain
2.section 37 of capital gain says that any disposal of asset rare precious things that keep hold and then sell it gaing profit will be treated as capital gain and included in the taxable income for tax deduction

FIN623 GDB

FIN623 3rd GDB

Q1 Does the individual partners are liable to pay tax on interest received from the partnership firm? Justify your answer in either case.Q2 A local company has hired services of private security guards for security of its key management personnel. Should the management staff be taxed for this benefit?

ANS:

When computing the amount of tax to be withheld from an employee’s salary, can tax credits under the Ordinance to which an employee is entitled be taken into account, such as those relating to:
a) Approved donations;
b) Interest on housing loan;
c) Investment in shares; and
d) Contribution to approved pension funds
Further, can the employer reduce the withholding tax for tax paid by the employee with utility bill payments and with payments for motor vehicle token fee?