Legal and Taxation Issue’s of Mr.

Maaz Ahmad

Presented by:

•Malik Jodat Abdullah

2020222
•Hifza Rani
2020169
•Muhammad Maaz Ahmed Siddiqui
2020323
 Basic Salary Rs.70000 P.M
Entertainment Allowance Rs.15000

Salary
Commission Rs.30000
Overtime Payment Rs.38000
Prize on prize bond Rs.15000
Donation to Bait-Ul-Mal Rs.20000
Income Agricultural income
Zakat
Rs.60000
Rs.23000

Excel
Calculations

2
 Analysis

• Based on the provided information, Mr. Maaz Ahmed is a resident individual for the tax year 2022 that ended on
June 30th, 2022. His total income for the year was Rs.923000, which included a basic salary of Rs.840000 per
annum, commission of Rs.30000, entertainment allowance of Rs.15000, overtime payment of Rs.38000, and
agricultural income of Rs.60000. After deducting the Zakat amount of Rs.23000, his taxable income was calculated
as Rs.900000.
• For tax payable, Mr. Ahmed's tax liability was calculated based on the progressive tax rate system. There is no tax
applicable on the first Rs.600000 of taxable income. However, for the remaining taxable income of Rs.300000, he is
liable to pay tax at a rate of 5%, which amounts to Rs.15000. Additionally, he has prize bonds worth Rs.15000 on
which he needs to pay a tax of 15%, amounting to Rs.2250. Therefore, the total tax payable by Mr. Ahmed for the
tax year 2022 is Rs.17250.

3
 Property repair expenses Rs.43243000
Lawyer fee to defend title of property Rs.510000
Insurance premium of the property Rs.2773200

Income from Property tax paid

Tax held by tenet @15%
Rs.543200
Rs.750000

Property Rental income paid to HBFC

Administrative and collection charges
Rs.320000
Rs.300000
 

Excel
Calculations

4
 Analysis
• Based on the information provided for Mr. Maaz Ahmed's tax return for the tax year 2022 that ended on June 30th, 2022. As a resident
individual, he is required to pay tax on his income from property in addition to his income from business.
• Mr. Ahmed has a property that he has rented out, and the annual rented value of the property is Rs.5000000. To calculate the taxable income
from property, allowable deductions and allowances are subtracted from the annual rented value. These deductions include the repairs
allowance, lawyer's fees, rental income paid to HBFC, administrative and collection charges, property tax paid, and insurance premium paid.
• The repairs allowance is fixed at 1/5th of the annual rented value, which is Rs.1000000 in this case. Lawyer's fees and rental income paid to
HBFC amount to Rs.510000 and Rs.320000, respectively. Administrative and collection charges are capped at 4% of the annual rented value,
which amounts to Rs.200000 in this case. Property tax paid is Rs.543200, and insurance premium paid is Rs.200000. After deducting these
allowable deductions and allowances, the total deductions amount to Rs.2773200.
• The total income from property is calculated by subtracting the total deductions from the annual rented value. In this case, the total income
from property is Rs.2226800. This amount is then added to Mr. Ahmed's income from business, which is Rs.6500000, to arrive at his total
income of Rs.8726800.
• The tax payable on Mr. Ahmed's total income is calculated at the rate of 29%, which amounts to Rs.2530772. However, he has already paid
tax on his income from property at a rate of 15%, which amounts to Rs.750000. This amount is subtracted from his total tax liability to arrive
at his tax payable with return, which is Rs.1780772.

5
 Income From business (Pak) Rs.350000
Income from Income from business (UK) Rs.600000
Tax paid in UK Rs.40000
Business

Excel
Calculations

6
 Analysis
• This tax calculation is for Mr. Maaz Ahmed's non-salaried income from business in Pakistan and the UK for the tax
year 2022, which ended on June 30th, 2022. As a resident individual, he is required to pay tax on his total taxable
income, which is Rs.950000.
• The gross tax payable on Mr. Ahmed's non-salaried income is calculated by applying the relevant tax rates to the
different income slabs. In this case, income tax on Rs.600000 is calculated at a rate of 0%, which amounts to Rs.0.
Income tax on Rs.350000 is calculated at a rate of 10%, which amounts to Rs.35000. The total gross tax payable is
Rs.45000.
• However, Mr. Ahmed is entitled to a tax credit in case of foreign income tax paid. He has paid Rs.20000 in foreign
income tax. To calculate the tax credit, the Pakistani income tax on the taxable income, the tax credit is then
deducted from the gross tax payable to arrive at the final tax payable, which is Rs.25000. The Pakistani Income tax
on taxable income is Rs.284210.

7
 Basic Salary Rs.460000
Bonus Rs.50000
Free accommodation provided by employer
Income from Conveyance Allowance
Donation to recognized educational institution
Rs.35000
Rs.72200

other sources Dividend from public limited company

Zakat
Rs.20000
Rs.2000
Book Purchased
Capital gain on sale of share of private company
(Disposed off within 12 months) Rs.47000
Profit on special deposit certificates Rs.24000
 

Excel
Calculations

8
 Analysis

• Mr. Maaz, a salaried individual and resident of Pakistan, had a total income of PKR 799,000 for the tax year 2022, which ended on
30th June 2022. His income included basic salary, bonus, value of rent-free accommodation, and capital gains from the sale of
shares.
• After deducting Zakat (a religious tax), his taxable income was PKR 797,000. The tax on his income was computed using the
Salaried Tax Rate, which resulted in a total tax liability of PKR 66,197. However, he was eligible for a rebate of PKR 72,000 for
donating to a recognized institution, which reduced his total tax liability to PKR 0.
• Mr. Maaz also had some income that was subject to Final Tax Regime (FTR), such as dividend income from a public limited
company and profit on special deposit certificates. The total tax on this income was PKR 5,400.
• Overall, Mr. Maaz had no tax liability for the year due to the rebate he received, but he did have a tax liability of PKR 5,400 on his
FTR income.

9
Suggesting how to increase Income of your
client and save Tax liability:

• Invest in tax-saving instruments.

• Take advantage of tax deductions.
• Start a side business.
• Plan your investments wisely.
• Avail tax credits.
• Increase Agricultural Income.

10