SEMESTER SPRING 2012
Taxation Management (623)
Assignment No. 2
Due Date: 14 June, 2012 Maximum Marks: 25
Assignment:
Mr. Jamal is now 62 years old and he is working on contract basis in a multinational group of
companies. He has to stay in different cities for more than one year for performing his duties. Rent
free accommodation and medical facility is provided to him by the company as per contract
agreement. He is also entitled to accommodation allowance of Rs. 17,000 per month, if, in case the
company’s accommodation is not available. For tax purpose, the house rent allowance is admissible at
the rate of thirty percent. Further, the following information is available for the tax year 2012:
Particulars Rs.
Basic salary (per month) 40,000
Medical expenses reimbursed 90,000
Children fee paid 10,000
Bonus 70,000
Free food during duty hours paid by employer 50,000
Gratuity approved from Commissioner of Income Tax received 50,000
Agricultural income 150,000
Loan payable to previous employer @ 14% for purchase of an asset paid by
current employer
50,000
Loan amount waived off 10,000
Cheque received as performance award from president of the company 50,000
Fair market value of Jeep provided by employer for personal and official use 950,000
Annual lease payment of jeep by the employer 90,000
Required:
• Calculate the taxable income and tax liability for the tax year 2012.
• Show working notes also.
Marking Scheme:
• 22 Marks for correct solution + 3 marks for formatting and presentation = Total 25 marks
Instructions:
For acquiring the relevant knowledge, do not rely only on handouts, course video
lectures, recommended book but also take help from Income Tax Ordinance 2001,
which can be downloaded for free www.cbr.gov.pk
Note:
Only in the case of Assignment, 24 hours extra / grace period after the due date is
usually available to overcome uploading difficulties which may be faced by the students
on last date. 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:
Please read the following instructions carefully before attempting the assignment solution.
Deadline:
• Make sure that you upload the solution file before the due date. No assignment
will be accepted through e-mail once the solution has been uploaded by the
instructor.
Formatting guidelines:
• Use the font style “Times New Roman”/ “Arial” and font size “12”.
• It is advised to compose your document in MS-Word 2003.
• Use black and blue font colors only.
Solution guidelines:
• Every student will work individually and has to write in the form of an analytical
assignment.
• Give the answer according to question.
• For acquiring the relevant knowledge don’t rely only on handouts but watch the video lectures and use other recommended resources as well.
Rules for Marking
Please note that your assignment will not be graded or graded as Zero (0) if:
• It has been submitted after due date
• The file you uploaded does not open or is corrupt
• It is in any format other than .doc (MS. Word)
• It is cheated or copied from other students, internet, books, journals etc.
