QUESTION 1

Zaid, a citizen of Pakistan,On 1 October 2020, he resigned from DSL and joined Tax Pharma
Limited (TPL) in Pakistan as a General Manager. He was offered following monthly salary
and allowance in TPL:

In addition to the above, he was also provided the following:

i. Bonus equal to two monthly basic salaries. However, bonus amount was adjusted in
proportion to
the duration of his stay in the company. The bonus amount was paid to him on 5 July 2021.
ii. Two company-maintained cars. Both cars were purchased on 1 October 2019. The car
costing Rs. 3,500,000 was used for official purposes whereas the car costing Rs. 1,900,000
was used for personal purposes.
iii. Free lunch from the restaurant owned by one of TPL’s directors. The fair market value of
food provided to him during the year was Rs. 125,000.
iv. A special allowance of Rs. 20,000 per month to meet expenses wholly and necessarily
incurred in the performance of his official duties. Actual expenses incurred by him during
the year were Rs. 150,000.
v. Provident fund contribution of Rs. 60,000 per month. An equal amount per month was
also contributed by Zaid to the fund.
Other information relevant to tax year 2021 is as under:
i. On 1 December 2020, Zaid obtained a loan of Rs. 25 million from a scheduled bank at 15%
markup per annum to acquire a residential house.
ii. During the year, Zaid paid educational expenses for his child which amounted to 1.75
million for the year.
iii. Withholding tax deducted by TPL from Zaid’s salary during the tax year 2021 amounted
to Rs. 1,300,000

Under the provisions of the Income Tax Ordinance, 2001 and Rules made there under,
compute under the the total income, taxable income since Zaid joined TPL for Normal Tax
Year 2021.
QUESTION 2
Mr. Naveed was employed on 1st August 2020 at ABC Limited in the monthly Basic Pay Scale
of
Rs.150,000 - 10,000 - 175,000. His monthly emoluments during the year ended 30th June
2021 were as follows:

Mr. Naveed was offered to either avail a house rent allowance of Rs.15,000 or rent free
accommodation.
He opted for the accommodation. Mr. Aslam has been provided free utilities with a
maximum limit of Rs. 10,000 per month. However, he generally consumed utilities worth Rs.
15,000 a month.
Mr. Naveed has also been provided with a motor vehicle for official as well as private use.
The vehicle was acquired by ABC Ltd on lease. The fair market value of vehicle was Rs.
1,500,000 at the inception of lease. However, under the lease agreement, ABC Ltd . was
required to pay a total sum of Rs.2,000,000 over the lease term.
During the month of December 2020, the employer waived a Rs. 100,000 loan due from Mr.
Naveed.
Further, the employer also re-imbursed children education expenses amounting to
Rs.46,000. Tax
deducted by employer at Rs. 7,000 per month out of Mr. Naveed’s salary.
Mr. Naveed left the job as well as Pakistan on 30th April 2021 and joined a new job at UAE
on a monthly
salary of AED 12,000 effective from 1st June, 2021. Conversion rate AED 1 = PKRs. 27/-
Required
Compute Mr. Naveed’s taxable income for tax year 2021