Section:C-1/B-1

Total marks: 17
Subject: CAF-06
Time allowed: 33 Mints.
Teacher: Mr. Sir Adnan Rauf
Test 6 Date: 25 Nov, 2019

Name: _________________________________ Rise ID:______________

Question-1
Mr. Mateen joined Melody Limited (ML) as an event organizer on July 1, 2011. On August 31, 2011 he
resigned from his employment without completion of notice period. On September 01, 2011 he joined
another company Rock Star Limited (RSL) as a senior event organizer. Following information is
available relating to his assessment for the tax year 2012:

(a) His salary and cash allowance per month in ML was Rs. 200,000.
(b) On September 01, 2011 RSL paid Rs. 280,000 to ML as compensation in lieu of un-served notice
period by Mr. Mateen.
(c) On September 15, 2011 Mr. Mateen received a gratuity of Rs. 350,000 from an unrecognized
gratuity fund maintained by ML. He also received Rs. 150,000 as leave encashment.
(d) In accordance with the terms of his employment with RSL, Mr. Mateen was provided with the
following emoluments / benefits during the tax year 2012:
(i) Basic salary of Rs. 245,000 per month
(ii) A reimbursement of personal medical expenses up to 15% of the annual basic salary and Rs.
250,000 on account of hospitalization charges of his daughter were made after procuring
hospital bills showing the national tax number of the hospital. These bills were also attested
and certified by RSL.
(iii) For the first two months of his employment, a pick and drop facility was provided to Mr.
Mateen at a monthly rent of Rs. 25,000. On November 01, 2011 RSL provided a company
maintained 1300 cc car which was partly used for private purposes. The cost of the car was
Rs. 1,500,000.
(iv) A special allowance of Rs. 50,000 was paid to meet expenses necessarily to be incurred in the
performance of his official duties. Actual expenditure was Rs. 40,000.
(e) On May 31, 2012 he received Rs. 180,000 from Mr. Ali as consideration for vacating his
bungalow.
(f) He also received a share of profit from a business in Malaysia equivalent to Pak. Rs. 535,000. He
paid Rs. 130,000 in taxes in Malaysia on such income.
(g) He earned an income of Rs.45,000 on the sale of jewelry but incurred a loss of Rs.28,000 on
sale of an antique. In both cases holding period was more than 1 year.
(h) Tax deducted at source from his salary, amounted to Rs. 250,000.

Required:
Calculate his tax liability for TY 2012?

(12)

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Question-2
Comment in short whether following business expenses are allowed as deduction?
1) Cess paid to the government on the profits of the company
2) Contribution to an unapproved superannuation fund
3) Payment to Monsoon Hotel for holding the annual get-together function for the employees of the
company and their families
4) Professional tax paid at Rs. 200,000 to the Government of Punjab. The tax is payable annually
irrespective of the income of the company.
5) Paid Rs.45,000 for personal mobile phone bill.
6) Rs. 30,000 were transferred to General Reserve fund.
7) 5% commission paid by Association of Persons to all its members.
8) Paid water charges Rs. 12,000 in cash. Total is Rs. 70,000 for the year.
9) Paid salary to employee of Rs. 15,000 in cash.
10) Paid Rs. 2,500,000 for the purchase of Machinery (Payment has been made through crossed
cheque) (5)

THE FIRST SCHEDULE

Division I
Rates of Tax for Individuals and
Association of Persons
(1) Subject to clause (2), the rates of tax imposed on income of every individual and association of
persons except a salaried individual shall be as set out in the following Table, namely:—

TABLE

S. No Taxable Income Rate of Tax

1. Where taxable income does not exceed Rs. 0%
400,000
2. Where taxable income exceeds 5% of the amount exceeding Rs. 400,000
Rs. 400,000 but does not exceed
Rs. 600,000
3. Where taxable income exceeds Rs. 10,000 plus 10% of the amount
Rs. 600,000 but does not exceed exceeding Rs. 600,000
Rs. 1,200,000
4. Where taxable Income exceeds Rs. 70,000 plus 15% of the amount
Rs. 1,200,000 but does not exceed exceeding Rs. 1,200,000
Rs. 2,400,000
5 Where taxable Income exceeds Rs. 250,000 plus 20% of the amount
Rs. 2,400,000 but does not exceed exceeding Rs. 2,400,000
Rs. 3,000,000
6 Where taxable Income exceeds Rs. 370,000 plus 25% of the amount
Rs. 3,000,000 but does not exceed exceeding Rs. 3,000,000
Rs. 4,000,000
7. Where taxable Income exceeds Rs. 620,000 plus 30% of the amount
Rs. 4,000,000 but does not exceed exceeding Rs. 4,000,000
Rs. 6,000,000
8. Where taxable Income exceeds Rs. 1,220,000 plus 35% of the amount
Rs. 6,000,000 exceeding Rs. 6,000,000

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 (2) Where the income of an individual chargeable under the head “„salary” exceeds seventy-five per
cent of his taxable income, the rates of tax to be applied shall be as set out in the following Table,
namely:—

S. No Taxable Income Rate of Tax

(1) (2) (3)
Where taxable income does not exceed 0%
1.
Rs. 600,000
2. Where taxable income exceeds 5% of the amount exceeding
Rs. 600,000 but does not exceed Rs. 600,000
Rs. 1,200,000
3. Where taxable income exceeds Rs. 30,000 plus 10% of the
Rs. 1,200,000 but does not exceed amount exceeding Rs. 1,200,000
Rs. 1,800,000
4. Where taxable income exceeds Rs. 90,000 plus 15% of the
Rs. 1,800,000 but does not exceed amount exceeding Rs. 1,800,000
Rs. 2,500,000
5. Where taxable income exceeds Rs. 195,000 plus 17.5% of the
Rs. 2,500,000 but does not exceed amount exceeding Rs. 2,500,000
Rs. 3,500,000
6. Where taxable income exceeds Rs. 370,000 plus 20% of the
Rs. 3,500,000 but does not exceed amount exceeding Rs. 3,500,000
Rs. 5,000,000
7. Where taxable income exceeds Rs. 670,000 plus 22.5% of the
Rs. 5,000,000 but does not exceed amount exceeding Rs. 5,000,000
Rs. 8,000,000
8. Where taxable income exceeds Rs. 1,345,000 plus 25% of the
Rs. 8,000,000 but does not exceed amount exceeding Rs. 8,000,000
Rs. 12,000,000
9. Where taxable income exceeds Rs. 2,345,000 plus 27.5% of the Amount
Rs. 12,000,000 but does not exceed exceeding Rs. 12,000,000
Rs.30,000,000
10. Where taxable income exceeds Rs. 7,295,000 plus 30% of the
Rs. 30,000,000 but does not exceed amount exceeding Rs. 30,000,000
Rs.50,000,000
11. Where taxable income exceeds Rs. 13,295,000 plus 32.5% of the amount
Rs. 50,000,000 but does not exceed exceeding Rs. 50,000,000
Rs.75,000,000
12. Where taxable income exceeds Rs. 21,420,000 plus 35% of the
Rs.75,000,000 amount exceeding Rs. 75,000,000

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