PROBLEMS-INDIVIDUALS BBA 05

Problem-01:
Raushan and Bina are husband and wife and are employees of R.B (Private) limited. In which they are also director and shareholders. They render you the following information pertaining to assessment year 20A-B. Raushan(Rs.) 48,000 1,200 ----4,800 20,000 5,000 Bina(Rs.) 24,000 600 6,000 2,400 20,000 5,000

Basic salary Entertainment allowance Rent assistance cash allowance Bonus Dividend from company(gross) Zakat paid into Zakat Fund Other particulars are as under.

A. Raushan occupies, in terms of his employment, an unfurnished rent free acccommodation an annual lease of Rs. 36000 paid by the company in advance at the begining of the year to his wife who owns the premises and lives with her husband. B. Boths are using company s car for Pvt as wellas for official work.the company has incurred Rs. 36,000 as total operating of the car for the year. C. They have paid on separate policies life insutance premiums during the year under assessment. Paid by Life Premium (Rs.) Sum Assured (Rs.) Bina Husband 3,000 50,000 Raushan wife 5,000 80,000 D. They have invested during the year Rs. 50000 in Defance saving Cartificates in joint names but in equal proportion. E. Bina claims the following expenses out of her property income: i. Property tax paid ii. Fire insurance iii. Expenses on gardening and colour You are required to compute, in case of both, taxable incom and net tax liability.

Problem-02: Naveed is a structural engineer employed by M/s pioneer Constructions (Private) limited. Further, he is
permitted by his employer to operate , in a limited way, as an independent consultant to oher companies and projects. In consideration. He accounts for 25% of the gross consulting fees collected to his employer. They render you the following account of his income,tax and investments for the financial year ended in june 30,20A A. Receipts from employer: i. Basic salary ii. Car allowance iii. House rent cash allowance iv. Entertainment cost reinmbursed(actual expenditures incurred on Cos businesss Rs. 20,500) v. Leave fare on assistance B. Consultancy Business: i. Consulting Fees Billed Collected net of tax Staff payroll Rs. 120,000 4,000 48,000 18,000 25,000

350,000 285,000

ii.

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PROBLEMS-INDIVIDUALS BBA 05
Desingn and draft Site supervision Stationery ,printing and copying Transportation Miscellaneous 45000 36,000 12,500 24,000 16,000 24,000 50,000 10,000 12,000 6,500 25,000

iii. iv. v. C. Dividend From listed companies (before zakat deduction). D. Investments: i. Defence saving certificates ii. Life insurance premimum own life. iii. Contribution to provident fund. iv. Books purchased on civil engineering. v. Khas deposit certificates. E. Tax and Zakat paid: i. Income tax at source deduction Under section 149 Under section 153 ii. Zakat deducted from dividend You are required : i. Compute total income and taxable income. ii. Determine the balance tax payable.

24,000 9,300 2,250

Problem-03: For the year ended on the 30th june 20A, the following parutculars of income of Mr. Taxpayer are
available. 1. 2. He receive salary of Rs. 80,000 from his empoyer and futher received Rs.3,600 as. Coneyance allowance and Rs. 5,000 as entertainment allowance during the year. Tax deducted at source amounts to Rs.5,600. The employers contribution to his recognized provident fund account was Rs.10,000 an equal amount being his own contribution. Interest @20% p.a the accumulated balance in his provident fund account amounting to Rs.6,500 was credited to his account during the year. He paid 4,000 premium to insure his own life for Rs. 50,000 and Rs.3,000 to insure the life of his wife for Rs. 20,000. He also calaimed exemption for rs. 5,000 paid as donation to a recognized charitable institution. He owns a propert which is let out at Rs.2000 P.m. the building was mortgaged with a bank when he obtained a loan of Rs. 50,000 @13% interest on 1st january, 20A for the purpose of purchasing some arricultural property. The interest due for the current year was not paid during the year.he incurred an expenditure of Rs.750for collectin rent. Another property was let out @ Rs. 4,000 p.m.on 1st june,20A he paid Rs. 1,000 as ground rent and Rs. 9,00 for fire insurance premium for this property. He receive dividends of Rs. 30.000 listed companies.Rs. 10,000 from a PVT company and Rs. 20,000 on PLS Bank Accont.Zakat deducted from these amounts was Rs. 1,500 and Rs. 3000 respectively .on 01-0720B wealth tax for assessment year 20A-B was determined at Rs. 4,500 which he paid on the same day.

3. 4. 5.

6.

You are required :

i. ii. Compute total income and taxable income. Calculate the net tax liability.

Problem-04: Mr.Exe is an executive in a company who has been paid salary Rs.15,000 p.m conveyance Allowance Rs.
2,500 p.m. and entertainment Allowance Rs. 2000 p.m. he has also been provided rent-fee furnished accommodation at a monthly rent of Rs. 10,000 duringthe year ended 30th june, 20A, he receivr bonus of Rs. 30,000 and leave encashment Rs. 15,000 hopitalization disbursements were Rs.6,000 but actual amount spent was Rs. 2,000 he uses his car partly for personal and partly for business purposes. Its running and maintenance costs are also borne by him. Providend fund contribution by employer was Rs. 22,000.

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PROBLEMS-INDIVIDUALS BBA 05
Mr. Exe paid annual life insurance premium of Rs. 5,000 on his policy of Rs.100,000 and Rs. 3,000 on his wifes police of 25,000 he he purchased shares of Rs. 75,000 of an investment comany and modaraba certificate of Rs. 25000 during the year he sold off private companies shares on which he made gain of Rs. 30,000 He is co-owner in arented property yielding annual of Rs. 120,000 including rent of furniture and fittings Rs. 400,000. Expence incurred as under: Property tax Insurance premium Collection charges Rs. 10000 2,000 12,000 K.M.C Tax wealth tax water tax arrears of last year 8,000 3,000 4,000

His share in the property is 25%. Mr. Exe received dividend from listed companies Rs. 15,000 (Net) and from other companies Rs. 8,000 (net) PLS Term depsit profit Rs. 2500 was also receive Zakat deducted Rs 3000 Rs 1000 and Rs. 500 respectively He was assessed to wealth tax for the first time and weaith tax determined at Rs. 1700 for the previous assessment year.income tax dedcted at source from salaries Rs. 6000.

You are required :

1. 2. Compute total income and taxable incom indicating the relevant provisons of the law for the inclusion/non inclusion of any incom as well as for admissible /inadmissible allowances and expenses. Calculate yhe balance tax payable. given below compute the

Problem-05:Mr.Aslam is the General Manager of a partnership firm.from the information

total income for the year ended 30 june 20B and tax payable by him. Salary Rs. 100,000 House rent allowance 54,000 Conveyance allowance 12,000 Electricity allowance 12,000 T.A and D.A for office work 20,000
th

On july 01, 20A he let out a house at the monthly rent of Rs. 3,000 and receive a dedosit of Rs. 20,000 not adjectable againt the rent. During the year he received Rs. 36,000 rent of that house. He made the following payment in this respect: Property tax(including arrears of last year Rs. 800) Rs. 2000 Fire insurance premium. 1,000 Rent collection charges. 8,00 His contribution to the recognized provident fund was Rs. 11,000 the employer contributed an equal amount. Deduction of zakat and income tax were Rs. 1,000 and Rs.7000 respectively. Defence saving certificates purchased amounted to Rs. 34,000 and premium paid on life policy was Rs. 3,000 he purchased books of professional nature amounting to Rs.3,000 and paid a donation to an approved charitable institution Rs.2,000. PROBLEM-06: Compute taxable incom of Mr. Ibad Qasim from property for the year ended 30th june,20A from the following data and state how it will be dealt with in hisassessment of income tax: i) Owns two houses, one having annual value of Rs. 60,000 assessed by property tax Authorities is occupied for own residence and the other having similarly assessed annual valueof Rs, 42,000 islet out. ii) House let out from 1st sep.20A on a contract for three yeras at a rent of Rs. 3,000 per month vacant in the earlier months. iii) Receive advavce rent of Rs. 36000 to be adjusted during the third year of contract . iv) Repair expenses of the house actually incurrred Rs. 4200. v) Insurance premium for a fire/riot policy Rs 3500 vi) Property tax payable bi-annually Rs.3000 total payable for the year Rs.6000 but only one payment actually made during the year. vii) Interest paid Rs.25000 on loan ,obtained for marriage of daughter, against the mortgage of the house.

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PROBLEMS-INDIVIDUALS BBA 05
viii) Rent collection charges actually incurred Rs. 1,200. Please give reasons,where necessary for your treatment of various items. PROBLEM-07: Mr.Aziz Ahmad provides the following information for te assessment of his income for the tax year ended on 30th june 20A determine his total income and the tax payable by him. Taxpayer was resident during the tax year. Receive rent Rs.20000 p.m. for full year. Receive un-adjustable security of Rs.50000 Property tax paid Rs.5000 outstanding Rs.6000 Interest of Rs.10000 paid on money borrowed for construction of the house Paid during this tax year property tax of Rs 5000 for the last year, it was not allowed as deduction in that year. Receive interest income of 5000 from saving account in bank. Receive Rs.200,000 on encashment of defence saving certificates Zakat of Rs. 5,000 was deducted thereon. PROBLEM-08: Mr. Asad is an executive of a company. He has furnished the following data for the tax year ended juny 30,20A i. Salay (p.m.) RS. 15,000 (in the pay scale of Rs.1,000-2,500-20,000) ii. Unfurnished accommodtion provided by the company (annual rental value Rs. 60,000) iii. Residential bills paid by the company total and a) Electricity 14,000 b) Water 2,000 c) Gas 4000 iv. Medical bills reimbursed during the year 20,000 v. Leave encashment 30,000 Leave fare assistance (being paid each year) 20,000 vi. He contributed towards: Recognized P.F 18,000 Live insurance premium 12,000 vii. He drived property incom from house; rented out at 3,000 per month on which he incurred following expenses during the year: a) Property tax 3000 b) Ground rent 1,000 c) Repair charges incurred5,000 d) Fire insuraince premium2,500 e) House remained vacant for two months.---viii. He receive Dividends and zakat was deducted as follows: Dividend (net) Zakat NIT 15,000 2,000 ICP 10,000 3,500 Publice Companies 4,000 2,750 ix. Defance saving Cartificates of Rs. 50,000 matured and encashment fof Rs. 75,000 x. wealth tax determined by the department at rs. 17000 and paid. xi. Tax deducted at source Rs. 30,000 from Salaries. You are required to compute. a) Total and taxable income. b) Tax payable on such incom.

i. ii. iii. iv. v. vi. vii. viii.

Problem-10: The following profit and loss account of Mr.Asrar Ahmed for the tax year ended on 30-06-20A.
> > Bad debts Rs. 2,000 Reserve for doubtful debts 1,800 Salary of staff 14000 Personal expenses of Mr. Asrar 7000 > Gross Profit > Bad debts recovered (earlier allowed as deduction) > sundary receipts > interest on securities Rs. 107,000 4,000 3,000 4,000

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PROBLEMS-INDIVIDUALS BBA 05
Audit fee800 Interst on capital of Mr. Asrar 3000 Depreiation on building7000 Contributin to an unrecogized Provident fund 3000 Net profit 79400 Total 118,000 NOTE: depreciation as allowable under the third schedule is Rs. 6,300 interest on securities is from 5% tax free federal GOVT. Securities. REQUIRED: Computed taxable income and calculate tax thereon.

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