Virtual University of Pakistan

Semester “SPRING 2021”

TAXATION MANAGEMENT (FIN623)
Assignment 02 Marks: 10

“Taxable Income and Tax Liability”

Question
Mr. Toor a Provincial Government employee of Pakistan was deputed on the official task in
Florida in 2016. He returned to Pakistan in July 2020 and remained in Pakistan for the period of 1
year. For the tax year 2021, following are the details of his incomes and other particulars:
Rs.
1. Monthly basic salary 120,000
2. Bonus 90,000
3. Adhoc allowance 50,000
4. Furnished accommodation provided by employer 200,000
5. Utilities paid by employer 80,000
6. Monthly medical allowance 50,000
7. Additional allowance paid by the employer 150,000
8. Conveyance provided for personal use
Value of car purchased by the employer 2,150,000
9. Interest-free loan taken from employer 4,000,000
10. Zakat paid 50,000
11. Investment in shares of a public company listed on
Stock Exchange of Pakistan 100,000

Requirement:
For the tax year 2021, determine for Mr. Toor:
a) Residential status (1 Mark)
b) Taxable income (6 Marks)
c) Tax liability (3 Marks)

You MUST provide all the calculations in DETAIL as each

calculation carry marks.
You MUST mention the relevant section/clause of the ITO 2001
and Income Tax Rules 2002 for the tax year 2021 to support
your answer and calculations as these carry marks.
IMPORTANT
24 hours extra / grace period after the due date is usually available to overcome uploading
difficulties. This extra time should only be used to meet the emergencies and above mentioned
due dates should always be treated as final to avoid any inconvenience.
IMPORTANT INSTRUCTIONS/ SOLUTION GUIDELINES/ SPECIAL
INSTRUCTIONS
BE NEAT IN YOUR PRESENTATION

OTHER IMPORTANT INSTRUCTIONS:

DEADLINE:
Make sure to upload the solution file before the due date on VULMS.
Any submission made via email after the due date will not be accepted.

FORMATTING GUIDELINES:
Use the font style “Times New Roman” or “Arial” and font size “12”.
Do not add watermarks, backgrounds, page colors, page borders, and etcetera.
It is advised to compose your document in MS-Word format ONLY.
You may compose your assignment in Open Office format.
Use black and blue font colors only.

RULES FOR MARKING:

Please note that your assignment will NOT be graded or graded as Zero (0), if:
It is submitted after the due date.
The file you uploaded does not open or is corrupt.
It is in any format other than MS-Word, Excel, or Open Office; e.g. PowerPoint, PDF, etc.
It is cheated or copied from other student(s), internet, given article, books, journals, etc.

Note related to load shedding: Please be proactive

Dear Students,
As you know that load shedding problem is prevailing in our country, therefore,
you all are advised to post your activities as early as possible without waiting for
the due date. For your convenience; activity schedule has already been uploaded on
VULMS for the current semester, therefore no excuse will be entertained after due
date of assignment.

BEST OF LUCK