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SRI Products (Pvt) Ltd. was incorporated on 01 January 2017, under the Companies Act No.07 of
2007 and commenced its business operations on the same day. It is engaged in the manufacturing
and exporting of kids’ clothing.

The following information has been extracted from the financial statements of SRI Products (Pvt)
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Ltd. for the year ended 31 March 2021:
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(1) The net profit before tax for the year ended 31 March 2021 after charging all expenses and
crediting all income was Rs.33,650,000/-. Total turnover of the company was
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Rs.634,400,000/- for the year ended 31 March 2021.

(2) Break-up of other income:

Rs.
Dividend income - net of WHT 301,000
Profit on disposal of machinery 168,000
469,000

(3) Details of property, plant and equipment are as follows:

Cost
Balance as at Balance as at
Additions Disposals
Asset 01.04.2020 31.03.2021
(Rs.) (Rs.)
(Rs.) (Rs.)
Land 8,000,000 - - 8,000,000
Buildings 10,000,000 - - 10,000,000
Machinery 8,210,000 2,460,000 5,750,000
Motor Lorries 2,465,000 1,350,000 - 3,815,000
Office Equipment 867,000 - - 867,000
Computers 1,850,000 - - 1,850,000
Computer software - 1,200,000 - 1,200,000
31,392,000 2,550,000 2,460,000 31,482,000

• Machinery which was purchased during the year of assessment 2017/18 at a cost of
Rs.2,460,000/- has been disposed in June 2020 for Rs.750,000/- due to continuous
technical errors.
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• A motor lorry was obtained under a finance lease agreement for a period of 4 years on 01 May
2020. Monthly installment of the lease was Rs.34,000/- and 11 installments were paid
during the year.

• Computer Software was acquired by the company during the year for Rs. 1.2 million.
The company has assessed its useful life as 10 years.

• Other than the machinery disposed, all the assets were acquired during the year of
assessment 2018/19.
(4) Administration expenses include the following:
• Depreciation charge for the year was Rs.6,242,000/-.

• The company has donated Rs.1,000,000/- to an approved charity, which is maintained a

home for displaced elders.

• Further, Rs.1,000,000/- worth of medical equipment was donated to IDH hospital (a

government hospital) for the benefit of COVID-19 patients.
• Gratuity provision for the year of assessment 2020/21 was Rs.1,563,000/-.
(5) Distribution expenses include the following:

• Entertainment expenses were Rs.234,000/-, and this was spent to entertain customers
who had come for business negotiations.
• The company has incurred Rs.1,450,000/- as advertising expenses in foreign media.
• An amount of Rs.800,000/- was incurred on Director’s foreign travelling to meet foreign
suppliers.

(6) Finance expenses include the lease interest of Rs.196,000/- which was paid on a finance lease
obtained during the year.

(7) The following information is also provided:

• The company has paid Rs.1,180,000/- as Economic Service Charge (ESC) for the
current year.

• The company has paid Rs.5,000,000/- as quarterly installments of income tax for the
year of assessment 2020/21.

You are required to:

Assess the following of SRI Products (Pvt) Ltd. for the year of assessment 2020/21:
(a) Assessable Income.
(b) Taxable Income.
(c) Gross Income Tax Payable.
(d) Balance Tax Payable.