CAF-02: TAX PRACTICES

TOPIC: SALARY
MOCK SOLUTION
Answer # 01:

Taxpayer: Mr. Khan

Tax Year : NTY-2024
Residential Status: Resident Individual

(A) SALARY
- Basic Salary (300,000*6) 1,800,000
- Conveyance Allowance (50,000*6) 300,000
- Medical Allowance (10,000*6) 60,000
- Accomodation of housing
Higher of:
Fair market rent (100,000*6) 600,000
45% of B. Salary (45%*300,000*6) 810,000 810,000
- Accomodation of Car 50,000
(2,000,000*5%)*6/12
- Interest free loan 125,000
(2,500,000*10%*6/12)
- Loan waived by employer 625,000
(2,500,000*25%)
- Compensation under redundancy scheme 4,000,000
- Gratuity under unapproved gratuity scheme 1,925,000
(2,000,000-75,000) - SBOI
- Purchase of Car (1,500,000-1,000,000) 500,000
- Employee share Scheme 500,000
Amount Chargeable 10,695,000
Add: Exempt Income (75,000+180,000) 255,000
TOTAL INCOME 10,950,000
Less: Exempt Income (255,000)
TAXABLE INCOME 10,695,000
Separate Block of Income 1,925,000
Other than SBOI 8,770,000

Tax Liability (W-1) 2,334,000

Less: Advance Tax (1,837,000)
Tax Payable 497,000

W-1: Tax Liability

SBOI (1,925,000*14%) 269,500
Other than SBOI (1,095,000+35%(2,770,000) 2,064,500
Tax Liability 2,334,000
Answer # 02:

Taxpayer: Mr. Salman

Tax Year : NTY-2023
Residential Status: Resident Individual

(A) SALARY

- Basic Salary 2,400,000

- House Rent Allowance 600,000
- Annual Bonus 480,000
- Free Meals while on duty -
- Staff Discount 40,000
- Health Insurance -
- Accomodation of Car (2,000,000*5%) 100,000
- ESOS (12,000*(110-98) 144,000
- PF Contribution
Contirbution made (2,400,000*8%) 192,000
Less: Exempt - Lower of
Rs. 150,000 - 150,000
1/10th of 2,400,000 - 240,000 (150,000) 42,000
- PF Interest
Interest charged (960,000*22%) 211,200
Less: Exempt - Higher of
16%*960,000 - 153,600
1/3rd of 2,400,000 - 800,000 (800,000) -
- Culinary Chef course -
Travelling Allowance - not spent on behalf of the emplyer (250,000-100,000 150,000

Amount Chargeable 3,956,000

Add: Exempt Income (70,000+450,000+150,000+211,200) 881,200
TOTAL INCOME 4,837,200
Less: Exempt Income (881,200)
TAXABLE INCOME 3,956,000
Tax Liability (435,000+(3,956,000-3,600,000)*27.5%) 532,900
Less: Advance withholding Tax (400,000)
Tax Payable 132,900