Income Tax Solved Numerical Problems
PROBLEM#2
Mr. Muhammad Tahir is the Chief Accountant of Defence Mall Lahore. He has furnished the following
particulars of his income for the tax year ended 30'a June 2022:
Basic salary . 900,000
Bonus (as not yet received) 120,000
Medical allowance 92,000
Special allwance p.m 7,000
Medical bill reimbursed
(without national tax number of medical practitioner) 28,000
Commission 140,000
Re-imbursement of Entertainment (bills official meeting) 35,000
Re-imbursement of interziet bill (used for private purpose) 25,000
Leave encashment during continuity of employment 100,000
Re-imbursement of utilities bills 30.500
Relocation allowance 30,000
Fees for refresher course paid by employer 25,000
Concessional loan benefit @ 8% 11,00,000
Hotel bills paid by the company relating to a pleasure trip 50,000
Accidental Insurance premium paid by the employer 38,000
Tax liability borne by the employer
Free coupon for lunch 60,000
Notes
1. Conveyance provided by employer for personal use of employee. Car was
purchased by employer for Rs. 750,000.
2. Muhammad Tahir was provided rent-free furnished accommodation by his
employer with accommodation allowance of Rs. 40000pm. If this
accommodation was not provided to him.
3. Special allowance 75000 pm.
Solution
Taxation by Mr. Sajjad Ali Shaikh
Tax Year 2023
Tax Year Ended: 30-06-2022
Residential Status: Resident
Computation of Tax Payable
Computation Rs. Rs.
Basic salary 900,000
Bonus (as not yet received) 120000
Medical allowance 92000
-10% 90000 2000
Special allowance 28000
Medical bill reimbursed
(without national tax number of medical practitioner)
Commission 140000
Re-imbursement of Entertainment (bills official meeting) 35000
Re-imbursement of internet bill (used for private purpose) 25000
Leave encashment during continuity of employment 100000
Re-imbursement of utilities bills 30500
Relocation allowance 30000
Fees for refresher course paid by employer
25000
22000
Concessional loan benefit @ 8% (10%-8%=2%)
Hotel bills paid by the company relating to a pleasure trip 50000
Accidental Insurance premium paid by the employer 38000
Free coupon for lunch 60000
Rent free furnished accommodation 312000
-Amount of rent (26000 x 12) 405000
- 45% B.S 405000
Whichever is higher
Conveyance provided by employer for personal use of employee. Car 75000
was purchased by employer for Rs. 750,000. FMV 10%
Special allowance 7000 pm. 84000
Less: Tax liability borne by the employer
134029
1959500
Tax Payable
Computation of taxable income:
Tax upto 1800000: 90000
44029
134029
Less: Tax liability borne by the employer 134029
Tax payable: Rs. 0
