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    TAX Papers - Paper 1

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    syedshah
    Mr. Yawar joined UPL in August 2016. His monthly emoluments included basic salary of Rs. 70,000, DA of Rs. 10,000, and yearly allowances of Rs. 90,000. He was provided a company vehicle worth Rs. 1 million and a company house. UPL also paid Rs. 175,000 of his debt and Rs. 450,000 as leave encashment from his previous job. His total taxable income the previous year was Rs. 1.2 million.

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    TAX Papers - Paper 1

    Uploaded by

    syedshah
    34 views2 pages
    Mr. Yawar joined UPL in August 2016. His monthly emoluments included basic salary of Rs. 70,000, DA of Rs. 10,000, and yearly allowances of Rs. 90,000. He was provided a company vehicle worth Rs. 1 million and a company house. UPL also paid Rs. 175,000 of his debt and Rs. 450,000 as leave encashment from his previous job. His total taxable income the previous year was Rs. 1.2 million.

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    TAX Papers_Paper 1

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    Mr. Yawar joined UPL in August 2016. His monthly emoluments included basic salary of Rs. 70,000, DA of Rs. 10,000, and yearly allowances of Rs. 90,000. He was provided a company vehicle worth Rs. 1 million and a company house. UPL also paid Rs. 175,000 of his debt and Rs. 450,000 as leave encashment from his previous job. His total taxable income the previous year was Rs. 1.2 million.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    34 views2 pages

    TAX Papers - Paper 1

    Uploaded by

    syedshah
    Mr. Yawar joined UPL in August 2016. His monthly emoluments included basic salary of Rs. 70,000, DA of Rs. 10,000, and yearly allowances of Rs. 90,000. He was provided a company vehicle worth Rs. 1 million and a company house. UPL also paid Rs. 175,000 of his debt and Rs. 450,000 as leave encashment from his previous job. His total taxable income the previous year was Rs. 1.2 million.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 2

    1) Mr. Yawar, joined a multinational company, Universe Pvt Limited (UPL) on 1st August-2016.

    UPL is
    engaged in the manufacturing of Chairs. Following is the detail of his monthly emoluments during the
    year ended 30-June-2017.

    Emoluments Amount in Rupees Monthly/Yearly


    Basic Salary 70,000 Monthly
    Dearness Allowance 10,000 Monthly
    Other allowances 90,000 Yearly

    Following further information is also available:


    a) On joining of UPL, he was allowed to use rental conveyance till he received a vehicle from UPL.
    For two months he used careem taxi and paid Rs. 5,000/- per month.
    b) On 1st October-2016, he received a vehicle, costing Rs. 1million for personal and office use.
    c) UPL also provided al bungalow which has market rent of Rs. 25,000/- per month.
    d) UPL has also paid Rs. 175,000/- to settle Yawar debt, payable to previous employer of Yawar.
    e) On resigned from previous employment, he received Rs. 450,000/- as leave encashment.
    f) Yawar total taxable income in previous year was 1.2 million.

    Required:
    Under the provisions of the income tax ordinance, 2001 and Rules made thereunder, compute
    total income, taxable income and net tax payable by/refundable to Mr. Yawar during the tax
    year 2017.
    Marks: 10
    2) Define Short term resident individuals and Returning Expatriates, under the income tax ordinance
    2001.
    Marks: 5
    3) What is the difference between Non-salaries case and Salaried Case?
    Marks: 2
    4) You are the Manager Taxation in Tax Consultant firm. One of your client, Mr. Wasif, approached
    you and has provided you following information:
    a) He resigned from his employment with Roadcross Pvt Limited (RPL) on 31-December, 2016
    b) He has received Rs. 150,000/- as leave encashment
    c) He has received Rs. 4,000,000/- under a Golden Handshake Scheme.
    d) His monthly salary was 350,000/- per month upto the date of his resignation.
    e) His taxable income and tax liability during the preceding four years was as follows:
    Tax Year 2012 2013 2015 2016
    Taxable income Rs. 2,650,000 2,800,000 3,000,000 3,870,000
    Tax paid Rs. 392,000 472,500 542,500 650,000

    Required:

    As Manager Tax, advise Mr. Wasif about the amount of income tax payable by him for the tax
    year 2017, under the income tax ordinance, 2001:

    i) Option 1: All income treated as an applicable tax rate Marks: 5


    ii) Option 2: Average Tax Rate on Golden Handshake Income Marks: 7

    Please advise Mr.Wasif, which option should he select. Marks: 1

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