Taxation Management (FIN623)

Assignment # 02
Marks: 20

Please read the following Instructions carefully before attempting the

Assignment:
• Last date for submission of Assignment is January 13, 2011.
• You are required to use the tax rates of year 2010-2011. You can use the
Income Tax Ordinance 2010-2011 uploaded on the LMS.
• You can consult the concerned topics from handouts and recommended
book for the assignment.
• Read the question carefully and provide complete solution. You are required
to provide complete calculation/working as it carries reasonable marks.
• Make sure that you upload the Assignment before due date. No assignment
will be accepted through E-mail after the due date.
• You are required to submit your solution in Microsoft Word 2003
format or in Open Office Writer format.
• The Assignment once uploaded over LMS will not be replaced so, care
should be taken while uploading files over LMS.
• According to ZERO TOLERANCE POLICY, cheating or copying of
assignment is strictly prohibited; NO CREDIT WILL BE GIVEN TO
COPIED ASSIGNMENT.
Please note that you will NOT be awarded any marks if:
• Your solution is submitted after due date.
• The file you uploaded is corrupt or does not open.
• Your assignment is found cheated or copied.
Question:

From the following particulars given by Mr. X, an officer in the Ministry of Trade, calculate
the taxable income and tax payable by him in respect of the year ended on June 30, 2010.

1. Basic salary Rs. 120,000

2. He has been provided with the rent-free furnished accommodation with annual value
of Rs. 60,000
3. He has been given a car by his employer and Rs. 1,000 per month to meet the running
costs, etc. he can take that car home as well.
4. He is provided one free Karachi-London and back air ticket every year. During the
year he received Rs. 17,000 in this respect.
5. Leave encashment paid to him Rs. 10,000.
6. He has let out his house at Rs. 3,000 per month. The tenant has left without paying
rent for two months, which could not be recovered despite the best efforts.
7. He claims the following payments including Rs. 400 as Zakat deposited in Zakat
fund.

Property tax Rs. 6,000 Fire Insurance Rs. 1,000

Corporation tax Rs. 5,000 Income tax deducted Rs. 3,000
Books purchased Rs. 5,000 Life Insurance Premium Rs. 6,000

8. The following amounts were received:

Dividend from NIT units (Zakat Rs. 1,000) 8,000
Dividend from XY (Pvt.) Ltd. (Zakat Rs. 600) 3,000

9. The life policy has Rs. 50,000 sum insured and the employee contributes one month’s
basic salary to the Recognized Provident Fund.