Particulars Total Income Exempt from Tax Taxable income Basic salary (700000*11) Note.

1 7,700,000 - 7,700,000 One time relocation allowance from paragon company 100,000 100,000 Medical allowance from Bricks Pakistan Note:2 770,000 - 770,000 Payment to an approved superannuation by Employer Note:3 100,000 100,000 Voluntary payment to reimburse H for the salary not received 400,000 400,000 Monthly allowance (20,000*11) 220,000 220,000 Honda civic motor vehicle for office and personal use (400,000*5%) Note:4 20,000 20,000 Motor vehicle Toyota Altis wholly for personal use (2,400,000*10%) Note: 5 240,000 - 240,000 Loan Note:6 0 0 0 Other incomes Income from business 1,000,000 - 1,000,000 Gain on sale of shares (600,000-500,000= 100,000) 100,000 100,000 Foreign interest income 800,000 800,000 Voluntary payment made by Mr. Ali a client of Bricks 500,000 500,000 Prize on a prize bond (not of which tax is deducted) 360,000 360,000 Total 12,310,000 370,000 11,850,000 B) Tax liability: Tax rate of 20% as given in serial # 20 for taxable income exceeding Rs.8, 650,000. Amount in Rs. Taxable Liability: 11,850,000 * 20% = 2,370,000 Less tax deducted at source by employer = 1,500,000 Net tax payable by Mr. Haaris = 870,000

Notes to taxable income statement of Mr. Harris

Note: 1 Basic first salary receive from Bricks Pakistan on 1st August 2011 and for the year 2012. It was received for eleven (11) Months. No salary was received from Paragon construction Lahore Note: 2 Medical allowances are exempt up to 10% of basic salary, it free hospitalization services are not provided by the employer. Note: 3 Employers contribution to superannuation funds under rule 3 of part 1 of sixth schedule exemption is available up to 10% of salary and excess amount shall be taxable. In this case amount Rs100, 000 is within the limit of prescribed limit of 10% of salary so it is exempt from tax. Note: 4 Party for personal and partly for office use. 5% of cost or 5% of FMV of vehicle, in case of lease is taxable. Note: 5 Valuation of conveyance For only personal use 10% of cost or 10% of FMV of vehicle, in case of lease will be charged to tax. Note: 6 Bench mark rate for Tax year 2012 is 12% Loan provided at the rate of mark up of 12% Since both rates are equal so no amount will be added back. (yeh kisi aur ka idea solution hai..shaid thora idea hojae aap sabko isse..but format is not too much helpful) anyways keep trying best of luck Dear Miss Samar,

The amount Rs. 360,000 is net after tax already deducted , therefore, it may not be included in the Taxable Income. Also amount Rs. 1,000,000 is share from partnership, will be added back to compute the taxable income but (25-20)% more tax Rs. 50,000 will be added in tax deducted , the net figure is as below; Taxable Income : Rs. 11,630,000 I.Tax 20% on Taxable Income : 2,326,000 Excess Tax on Share from Partnership : 50,000 Less: Tax deducted at source ; 1,500,000 Net Payable Tax : Rs. 870,000/Kindly, confirm me , am I right.
Reply by sabir 23 hours ago

Particulars Salary Relocation Allowances

Total Income 4800000 100000

Exempt Income ------------

Taxable Income 4800000 100000

Medical Allowance 40000 10% Total Taxable Income

40000

-------4900000 931000

Tax rate of 19% #20 taxable income exceeding Rs 4450000 is

Salary Medical Allowance Bricks to payment Lease Amount Special Monthly Allowance
Tax liabilities

700000x12 70000x10% 100000 400000 20000

--------770000 100000 ------

9600000 --------------400000 20000

Shares of the 100000x 12% =Rs 120000 Tax liability I 11850000 x20 % =Rs 2370000 Less tax Deducted Rs. 1500000 Net Tax Payable of Mr. Haris is Rs.870000 Medical allowances are exempt 10% of the basic salary Employee contribution supronnents fund under rule 3 part 1 Partly of convince is also exempt Bench mark for the tax year is 12 % for the year of 2012 tax year One time relocation allowance from paragon company 100,000 - 100,000 Medical allowance from Bricks Pakistan Note:2 770,000 - 770,000 Payment to an approved superannuation by Employer Note:3 100,000 100,000 Voluntary payment to reimburse H for the salary not received 400,000 400,000 Monthly allowance (20,000*11) 220,000 220,000 Honda civic motor vehicle for office and personal use (400,000*5%) Note:4 20,000 20,000 Motor vehicle Toyota Altis wholly for personal use (2,400,000*10%) Note: 5 240,000 - 240,000 Note: 1 Basic first salary receive from Bricks Pakistan on 1st August 2011 and for the year 2012. It was received for eleven (11) Months. No salary was received from Paragon construction Lahore Note: 2 Medical allowances are exempt up to 10% of basic salary, it free hospitalization services are not provided by the employer. Note: 3 Employers contribution to superannuation funds under rule 3 of part 1 of sixth schedule exemption is available up to 10% of salary and excess amount shall be taxable. In this case amount Rs100, 000 is within the limit of prescribed limit of 10% of salary so it is exempt from tax. Note: 4 Party for personal and partly for office use. 5% of cost or 5% of FMV of vehicle, in case of lease is taxable. Note: 5 Valuation of conveyance For only personal use 10% of cost or 10% of FMV of vehicle, in case of lease will be charged to tax. Note: 6 Bench mark rate for Tax year 2012 is 12% Loan provided at the rate of mark up of 12% Since both rates are equal so no amount will be added back.

Reply by Malik Muhammad Jahangir 23 hours ago

Solution Provided by "SAMAR" correct with following CHANGES: 1- Payment to an apporved superannuation fund Rs.100,000/- will not be used for computation of taxable income. 2- Voluntary payment to reimburse H for the salary not received Rs.400,000/- exempt as foreign source income 3- Monthly allowance Rs.220,000/- exempt from tax {Refer to the section 12(2)(c) of Income tax ordinance 2001. 4-Honda civic motor vehicle for office and personal use (400,000*5%) for 11th month so Rs. 18,333/- taxable instead of Rs.20,000/5-Motor vehicle Toyota Altis wholly for personal use (2,400,000*10%) for 11th month so Rs. 220,000/- taxable instead of Rs.240,000/-

6-Loan: Rs. 15,000 taxable instead of Rs.6,000/- ( benchmark rate is 14%) {14% - 12% = 2%) 1,000,000 *2% for 9th month. 7- Gain on sales of shares will not be included for computation of taxable income as shares held for less than one year { refer to the Section 37(3) of ITO 2001. 8- Prize on Prize bonds also not included for calculation of taxable income hence prize on prize bonds is taxable under "Presumptive tax Regime (PTR). COMPUTATION OF TAX LIABILITY:\ 1- Calculate Tax credit on shares of profit from AOP 2- Tax credit on purchase of shares ( Under Section 62(1) of ITO 2001) 3- Add back Rs.50,000/- tax credit already allowed ( Under Section 62(3)(b) of ITO 2001.)