TAX PRACTICES

Summary of Marking Key

Certificate in Accounting and Finance – Autumn 2022

Note regarding marking scheme:

The marking scheme is given as a guide. Markers also award marks for alternative approaches to
a question and relevant/well-reasoned comments/explanations. Moreover, the available marks in
answer may exceed the total marks of a question.

Mark(s)
A.1 (a)  Total/taxable income:
– Adjustment in loss before tax in respect of:
o purchase of new machine 4.0
o purchase of specialized software 2.0
o payment of lease rentals 3.0
– Other adjustments 4.0
 Tax liability under minimum tax 2.0

(b) Tax implication in respect of scholarship received by Sara 2.0

A.2 (a)  Income from salary 8.0

 Income from other sources 2.0
 Tax credits 3.0
 Tax liability 1.0

(b) Tax implication for APL in respect of provision of residential house to Nasir 2.0

A.3 (a) (i)  Determination of the amount to be chargeable to tax under the head
‘Capital gain’ 4.0
 Reason for ignoring the gain/loss on given assets 2.0

(ii) Computation of tax liability 2.0

(b)  Income from property 2.0

 Capital gain 2.0
 Income from other sources 2.0
 Tax liability 1.0

A.4 Discussion on taxability of:

(a) foreign source income of short-term resident individual 3.0
(b) foreign source income of returning expatriate 3.0
(c) foreign source salary of a resident person 2.0

A.5 (a) (i) Discussion on:

 normal assessment 1.0
 best judgement assessment 2.0

(ii) Stating the requirements that should be complied with by a sole proprietor
on discontinuance of business 2.0

(iii) Listing of additional records 2.0

(b) 0.5 mark for each rule up to maximum of 03 marks 3.0

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 TAX PRACTICES
Summary of Marking Key
Certificate in Accounting and Finance – Autumn 2022

Mark(s)
A.6 (a) Explanation for the requirement of registration of following persons:
 A manufacturer 2.0
 A retailer 1.0
 A distributor 0.5
 An exporter 0.5

(b) 01 mark for each exception 3.0

A.7 (a)  Sales tax credits – input tax 7.0

 Sales tax debits – output tax 4.0
 Apportionment of input tax 2.0
 Sales tax to be carried forward 1.0
 Sales tax to be refundable 1.0

(b) 01 mark for the reason for ignoring any transaction 4.0

A.8 (a)  Preparation of tax returns 1.0

 Tax calculation for the purpose of preparing accounting entries 4.0

(b) 0.5 mark for identifying the scope of legislation for each tax/duty 3.0

(THE END)

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