For B.

Com Part 2 Business Taxation Paper 2018

These Income Tax and Sales Tax Numericals Covers the Basic Concepts which will help students to solve any Numerical Question in Paper.

Income Tax Numerical

27 MR. MUSADDIQUE NOOR
Mr. Musaddique Noor is a consultant in a group of companies. He derived following income during the
income year July 01, 2017 to June 30, 2018:
Particulars Rupees
(i) Salary income
Basic salary 20,000per month
House rent allowance 8,000 per month
Utility allowance 1,000 per month
Medical allowance 1,000 per month

He is also provided with a 1,000 cc car valuing Rs 500,000, which is partly used for company's
business. He has also been granted a housing loan of Rs. 550,000 on which no profit/interest
has been charged.
In addition to above, he also received a gratuity of Rs. 75,000 from his previous employers during
the year. The gratuity fund is not approved by the Commissioner of Income Tax or CBR.
Tax deducted at source from his salary amounted to Rs. 15,000.
(ii) Property Income Rupees
Rent from a house let out 100,000 per month
He incurred following expenses on this property during the year:
Repairs 30,000
Collection & administrative charges 7% of rent
Ground rent 10,000
Property Tax 15,000
Rent-sharing with housing finance company 3,000 per month

He received a deposit of Rs. 2,000,000, not adjustable against rent, out of which he refunded Rs.
1,000,000 to previous tenant, 'who vacated the house after 3 years' tenancy.
(iii) Other Income Rupees
Profit on PLS Bank account (net of 10% withholding tax) 9,000
Commission from Sale of plots (net of 10%withholding tax) 18,000
Lecturing and examination services fees from
Professional institutes 20,000
Required:
As a tax consultant you are required to compute Mr. Musaddique's total income and his income tax
liability for the tax year 2018 (ignore minimum tax u/s 153 application, if any).

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 Solution
MR. MUSADDIQUE NOOR
RESIDENT INDIVIDUAL
TAX YEAR 2018
COMPUTATION OF TAXABLE INCOME
Exemption/
Gross Taxable
Particulars admissible Remarks
amount income
deductions
Income from salary
Basic salary 240,000 240,000
House rent allowance 96,000 96,000
Utility allowance 12,000 12,000
Medical allowance 12,000 12,000 Exempt up to 10% of
basic salary U/c 139
Part I, 2nd Sch.
Co. maintained car 1,000 CC 25,000 25,000 Rs. 500,000 x 5%
Interest on housing loan 55,000 - Not taxable up to
Rs. 1 million
Gratuity 75,000 37,500 37,500 (50% of gratuity is
Exempt u/c 13 of
2nd Sch.)
Income from salary (A) 410,500
Income from property
Rent from house let out 1,200,000
Un-adjustable advance N-1
170,000 1,370,000
Income from property (Separate block of Income (B)) 1,370,000
Income from other sources
Lecturing and examination
fee 20,000 20,000
Income from other sources (C) 20,000
Total Income (A+B+C) 1,800,500
Less: Income from property (Separate block of income) (1,370,000)
Taxable income 430,500
Computation of Income tax liability on the taxable
income for non-salaried individual 430,500
Tax on Rs. 430,500 [0 + 30,500 @ 2%] 610
Tax on property Rs. 1,370,000 [ 60,000 + 370,000 @ 15%] 115,500
Tax on profit on debt 10,000@ 10% 1,000
Tax on commission 20,000 @ 12% 2,400
Total tax liability 119,510
Less tax deducted
Tax on salary 15,000
Tax on PLS account profit 1,000
Tax on commission 2,000
Total tax paid 18,000
Balance tax payable 101,510

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 Sales Tax Numerical
53 M/S SAFI ELECTRONICS
M/s Safi Electronics are engaged in manufacturing of electronic goods and are registered under Sales
Tax Act, 1990 as manufacturer-cum-exporter. During the month of March, 2018, their sales /purchases
data were recorded as under:
Rs.
(i) Local purchases
(a) From registered persons 4,500,000
(b) From Un-registered persons 1,200,000
(ii) Imports (Raw material for own consumption) 2,300,000
(iii) Utility bills(exclusive of GST) (GST Rs 75,000) 500,000
(iv) Sales to registered persons 3,200,000
(v) Sales to un-registered persons 3,600,000
(vi) Exports 3,000,000
Note:
(1) All the above figures are exclusive of sales tax paid or recovered.
(2) The owner also took goods worth Rs. 200,000 for his private use.
(3) Purchases include an invoice of Rs. 100,000 dated 27 February, 2018 which was not included in
the sales tax return for February, 2018 due to its late receipt.
(4) Un-adjusted input tax carried forward from last month amounted to Rs. 45,000
Required:
Calculate Sales Tax liability by M/S Safi Electronics for the month of March, 2018.

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 Solution
SAFI ELECTRONICS
COMPUTATION OF SALES TAX LIABILITY
TAX PERIOD: MARCH 2018

Particulars Computation Sales Tax

Input tax
Purchases from registered person 4,500,000 - 100,000 748,000
@17%=
Purchases from un-registered persons 1,200,000
Utility bills 75,000
Imports 2,300,000 @17%= 391,000
Input tax omitted to be claimed in the relevant month of 100,000*17% 17,000
February, 2018
Input tax for the month 1,231,000
Input tax brought forward from the preceding month 45,000

Input tax related to exports to be refunded 1,214,000 x (364,200)

3/3.2+3.6+0.2+3
Accumulated credit to be claimed 1,276,000 – 364,200 911,800
Output tax
Sales to registered person 3,200,000 @17% 544,000
Sales to un-registered person 3,600,000 @17% 612,000

Supply on account of personal use of goods 200,000 @17% 34,000

Exports 3,000,000 @0% 0
Total output tax 1,190,000
Input Adjustment: 278,200
(Lower of 90% of output and actual input )
Sales tax payable Rs. (1,190,000-911,800)
Add: Further tax on sales to un-registered person 3,600,000 @2% 72,000
Refund of tax 3,000,000/10,000,000 x 1,214,000 364,200

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