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 companys 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 Basic salary (per month) Medical expenses reimbursed Children fee paid Bonus Free food during duty hours paid by employer Gratuity approved from Commissioner of Income Tax received Agricultural income Loan payable to previous employer @ 14% for purchase of an asset paid by current employer Loan amount waived off Cheque received as performance award from president of the company Fair market value of Jeep provided by employer for personal and official use Annual lease payment of jeep by the employer

Rs. 40,000 90,000 10,000 70,000 50,000 50,000 150,000 50,000

10,000 50,000 950,000 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 dont 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.