Mr. Samiullah had been working as Assistant Manager Marketing
for last 15 years in M/s. Moonlight Limited, a public limited
company. In addition to salary, perks and allowances given to him
by the company, he has various other sources of income. Assume that
Mr. Samiullah is 62 years old and has been retired from the company
services on June 30, 2019. You are his Tax Consultant. He has
submitted the following information for the tax year ended June 30,
2019 in order to seek your advice in respect of the calculation of
his taxable income and tax liability.
Rupees
A. i) Basic salary per annum 500,000 500,000
ii) Perquisites and allowances paid by the employer:
Bonus 80,000
Entertainment allowance 10,000
Dearness allowance 180,000
House rent allowance 225,000
Gratuity (scheme approved by FBR) 625,000
Encashment of leave preparatory to retirement 120,000
B. Property Income:
Mr. Samiullah rented his house @ Rs. 12,000 per month w.e.f 1st
July, 2018. He received a deposit of Rs.150,000, not adjustable
against rent, out of which he refunded Rs.75,000 to previous
tenant, who vacated the house after 3 years' occupancy. Tenant also
paid property tax of Rs. 6,000 as per lease agreement. Assume that
Mr. Samiullah claimed the following expenditures for the year ended
30th June, 2019.
Rupees Rupees
Interest on borrowed capital 7,000
Insurance premium paid to cover the risk for property damage
10,000
Repair and maintenance expenses 25,000
C. Other information
Share from unregistered firm (AOP) 20,000
D. Zakat deducted at source 8,000
Required: (20)
Calculate taxable income and tax liability of Mr. Samiullah for the
year ended June, 30, 2019.
(kindly solve in the context of pakistan)
Basic salary | 500000 | |
Bonus | 80000 | |
Entertainment allowance | 10000 | |
Dearness allowance | 180000 | |
HRA | 225000 | |
Encashment of leave preparatory to retirement |
120000 | |
Gratuity | 625000 | |
exempt | (200000) | 425000 |
Total taxable salary | 1540000 | |
Income from property | ||
Rent (12000x12) | 144000 | |
Property tax by tenant | 6000 | |
Advance not adjusted [150000-(75000x3/10)]/10 |
12750 | |
Admissible deductions | 162750 | |
1/5th repair allowane (162750x1/5) | (32550) | |
Interest on borrowed capital | (7000) | |
Insurance premium paid | (10000) | 113200 |
Income from other sources | ||
Share from unregistered firm | 20000 | |
TOTAL INCOME | 1673200 | |
Less Zakat | (8000) | |
Taxable income | 1665200 |
Calculation of income tax:
Tax = 92000 + 15% (1665200 - 1500000) = 116780
Tax on unregistered firm = (116780/1665200)x20000 = 1403
Tax = 116780 - 1403 = 115377
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