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Pension Income

- Employee contribution in the occupational pension increases the expense

and hence gives tax relief.
- Employer’s contribution in the occupational pension is not included in the
benefit section of employment p&l. Thus, it decreases the taxable income
and hence gives tax relief.
Employment P&L

Q. salary = 80,000
Employer’s contribution in the occupational pension = 15,000
Employee contribution in the occupational pension = 10,000
Required = ITL
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Q. salary = 95,000
Employee contribution in the occupational pension = 15000
Employer’s contribution in the occupational pension = 12,000
Child benefit received = 2,000
Gift aid donation paid = 12,000
Req. = ITL?

**note: Employee contribution in the occupational pension should be treated as a

normal expense in employment p&l.
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All three step works for both:

- Gift Aid Donations
- Personal Pension Scheme

We can take Relevant Earning as “Mehanat ki kamai”

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We need to take membership every year.

This A.A is for both occupational pension(Er & Ee) and personal pension. The
excess claimed will be taxed as non-saving income.
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Q. Salary = 80,000
PPC paid = 32000 net
GAD = 1600 net
Employee contribution = 7,000
Employer contribution = 4,000
Q.I.P(Qualified Interest paid) = 3,000
Unused annual allowance = 2,000
Req. = I.T.L?
Ans:
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Total net income= non saving + interest + dividend

Q.
Trading Income=280000
QIP=13000
A.A b/f=15000
Total available AA for the fiscal year 21/22=?
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Note: band extension is because of TRC not Gross PPC. Motive to get pension
relief is to extend our band.No band extension means no pension relief.
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