Question One Income tax Return of Mary Watson for the year ended 31 December 2010 Income Salary

Bonus Interest Add Fringe Benefits: Housing Allowance Medical Insurance 14,400 2,800 -

Explanation

144,000 17,000 4,230 165,230

Taken as income as reference to Section 11 of the Fiji Income Tax Act Taken as income as reference to Section 11 of the Fiji Income Tax Act Taken as income as reference to Section 11 of the Fiji Income Tax Act

Refer to Practise Statement 30, Page 4, Number 13 Refer to Practise Statement 30, Page 8, Number 33 17,200 182,430 Income + Fringe benefits

Total Income Less: Deductions FNPF Marital allowance Child allowance Chargeable Income Total Tax Liability Less: Tax Paid Total Tax Payable 1,500 1,200 1,300

4,000 178,430 50,627 635 49,992.30

Taken as a deduction with reference to Section 26 of the Fiji Income Tax Act Taken as a deduction with reference to Section 25 of the Fiji Income Tax Act Taken as a deduction with reference to Section 25 of the Fiji Income Tax Act Total Income - Deductions Calculate as per the resident tax rates (rounded off to nearest dollar) Resident interest withholding tax has already been paid Total Tax Liability less Tax Paid

Note: 1) Motorvehicle and mobile phone amounts will not be taken as fringe benefits because they are for business purpose only. If it was for personal purpose, then it would be taken as a fringe benefit. 2) Some students have shown under other income as interest totalling (4230-635 = 3595). Note that tax paid of $635 should be shown separately and not deducted already and shown under total income.