1) Mr. Yawar, joined a multinational company, Universe Pvt Limited (UPL) on 1st August-2016.

UPL is
engaged in the manufacturing of Chairs. Following is the detail of his monthly emoluments during the
year ended 30-June-2017.

Emoluments Amount in Rupees Monthly/Yearly

Basic Salary 70,000 Monthly
Dearness Allowance 10,000 Monthly
Other allowances 90,000 Yearly

Following further information is also available:

a) On joining of UPL, he was allowed to use rental conveyance till he received a vehicle from UPL.
For two months he used careem taxi and paid Rs. 5,000/- per month.
b) On 1st October-2016, he received a vehicle, costing Rs. 1million for personal and office use.
c) UPL also provided al bungalow which has market rent of Rs. 25,000/- per month.
d) UPL has also paid Rs. 175,000/- to settle Yawar debt, payable to previous employer of Yawar.
e) On resigned from previous employment, he received Rs. 450,000/- as leave encashment.
f) Yawar total taxable income in previous year was 1.2 million.

Required:
Under the provisions of the income tax ordinance, 2001 and Rules made thereunder, compute
total income, taxable income and net tax payable by/refundable to Mr. Yawar during the tax
year 2017.
Marks: 10
2) Define Short term resident individuals and Returning Expatriates, under the income tax ordinance
2001.
Marks: 5
3) What is the difference between Non-salaries case and Salaried Case?
Marks: 2
4) You are the Manager Taxation in Tax Consultant firm. One of your client, Mr. Wasif, approached
you and has provided you following information:
a) He resigned from his employment with Roadcross Pvt Limited (RPL) on 31-December, 2016
b) He has received Rs. 150,000/- as leave encashment
c) He has received Rs. 4,000,000/- under a Golden Handshake Scheme.
d) His monthly salary was 350,000/- per month upto the date of his resignation.
e) His taxable income and tax liability during the preceding four years was as follows:
Tax Year 2012 2013 2015 2016
Taxable income Rs. 2,650,000 2,800,000 3,000,000 3,870,000
Tax paid Rs. 392,000 472,500 542,500 650,000

Required:

As Manager Tax, advise Mr. Wasif about the amount of income tax payable by him for the tax
year 2017, under the income tax ordinance, 2001:

i) Option 1: All income treated as an applicable tax rate Marks: 5

ii) Option 2: Average Tax Rate on Golden Handshake Income Marks: 7

Please advise Mr.Wasif, which option should he select. Marks: 1