ACCA | F6 - Taxation Solved Past Papers

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Business Taxation

(Pakistan)

PART2WEDNESDAY 8 DECEMBER 2004QUESTION PAPER

Time allowed

3 hoursThis paper is divided into two sectionsSection A

BOTH questions are compulsory and MUST beanswered

Section B

THREE questions ONLY to be answered

Tax rates and allowances are on pages 2–3Do not open this paper until instructed by the supervisorThis question paper must not be removed from the examinationhallThe Association of Chartered Certified Accountants

P a p e r 2 . 3 ( P K N )

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The following tax rates and information are to be used in answering the questions:

A. Tax rates for individuals and associations of personsTaxable incomeRate of tax

Up to Rs. 80,0000%Rs.180,001 – Rs. 150,0007·5% of the amount exceeding Rs. 80,000Rs. 150,001 – Rs. 300,000Rs. 5,250 plus 12·5% of the amount exceeding Rs. 150,000.Rs. 300,001 – Rs. 400,000Rs. 24,000 plus 20% of the amount exceeding Rs. 300,000.Rs. 400,001 – Rs. 700,000Rs. 44,000 plus 25% of the amount exceeding Rs. 400,000.Rs. 700,001 and aboveRs. 119,000 plus 35% of the amount exceeding Rs. 700,000.

B. Reduction in tax liability of salaried individuals where salary income exceeds 50% of taxable incomeIncome slabReduction in tax liability

Up to Rs. 60,00010%Rs.–60,001 – Rs. 80,00070%Rs.

–

80,001 – Rs. 100,00060%Rs. 100,001 – Rs. 150,00050%Rs. 150,001 – Rs. 200,00040%Rs. 200,001 – Rs. 300,00030%Rs. 300,001 – Rs. 500,00020%Rs. 500,001 – Rs. 1,000,00010%Rs. 1,000,001 and above15%

C. Tax rates for companiesTax YearBankingPublic company otherPrivate company othercompanythan a banking companythan a banking company

200347%35%43%200444%35%41%200541%35%39%200638%35%37%200735%35%35%

D. Tax rates on dividends received from companies

Received by a public company or an insurance company5% of the gross dividendIn any other case10% of the gross dividend

E. Tax rates on certain payments to non-residents

Fees for technical services (FTS)15% of the gross amountOther than for royalty or FTS30% of the gross amount

F. Rates of advance collection or deduction of tax at source

Profit on bank deposits10% of the profit paidYield on certificates under the National Savings Schemeor Post Office Saving Account10% of the yield paidSale of goods3·5% of the gross amount payablePrizes and winnings10% of the gross amount paidContracts up to the value of Rs.30 million5% of the amount of the payment2

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G. Capital allowancesDepreciation

Factory buildings10%Residential quarters for labour10%Other buildings5% of the tax written down valuePlant and machinery (not otherwise specified)10%Motor vehicles (all types)20%

Initial allowance

50% of cost

H. Value of free unfurnished accommodation where salary is Rs. 600,000 or moreLand areaValue for areas within municipal limits

Up to 250 sq. yardsRs. 40,000251 to 500 sq. yardsRs. 106,000501 to 1000 sq. yardsRs. 199,0001001 to 2000 sq. yardsRs. 370,0002001 sq. yards and overRs. 462,0003[P.T.O.

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