Section:C-1/B-1

Total marks:19
Subject: CAF-06
Time allowed: 35 Mints.
Teacher: Mr. Sir Adnan Rauf
Test 5 Date: 18 Nov, 2019

Name: _________________________________ Rise ID:______________

Question-1
Mr. Arif aged 65 years is working in a private company and has disclosed following data form
employment from where he got retired on June 30, 2018:
1. Basic salary per month is Rs. 120,000.
2. Medical allowance is Rs. 20,000 per month.
3. Hospitalization cost is covered by an insurance policy upto the amount of Rs. 1.5 million. The
insurance premium relating to this benefit amounted to Rs. 55,000. This amount is as per terms of
employment.
4. He was provided with a car costing Rs. 800,000 which is used partly for private purpose. The
employee pays Rs. 3,000 per month to employer against this benefit.
5. An amount equal to one basic salary was paid by employer to an approved pension fund.
6. Provident fund (PF) contribution of Rs. 30,000 per month. An equal amount per month was
contributed by Arif to the fund. Interest income of Rs. 391,000 at the rate of 20% of accumulated
balance of PF was credited to his PF account.
7. Arif received following payments from employer on 30 June 2018 at retirement:
o Rs. 600,000 in respect of termination benefits under an agreement.
o Rs. 5,000,000 from recognised provident fund as final receipt from accumulated balance.
8. His total assessed taxable income and total taxes paid thereon during the 3 preceding tax years
amounted to Rs. 10,500,000 and Rs. 1,110,000 respectively.
9. Withholding tax deducted from Arif‟s salary during tax year 2018 amounted to Rs. 950,000.

He further provided the following data:

i) An apartment owned by Mr. Arif was rented on July 1, 2017 to Mr. Abdul Ghaffar at a monthly
rent of Rs. 22,000. He received a non-adjustable security deposit of Rs. 150,000 which was partly
used to repay the non-adjustable security deposit amounting to Rs. 90,000 received from the
previous tenant in July 2014. He also incurred Rs. 20,000 on account of repairs to the apartment.
ii) 5,000 shares were purchased for Rs. 600,000 from initial public offering of a new listed company.
iii) Premium of Rs. 300,000 was paid on Arif‟s life insurance policy.
iv) He also received Rs.150,000 as cash dividend declared by a company. The share registrar
correctly treated deducted withholding tax.
v) Donations of Rs. 80,000 were paid to charitable institutions listed in the Second Schedule of the
Income Tax Ordinance, 2001.
Required: Compute the tax liability for Mr. Arif for the tax year 2018. (12)

Question-2
a) Can commissioner demand return of income from person (03)
b) List the situations in which the commissioner can ask the taxpayer to file return of income for a
period of less than one year (04)

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(2) Where the income of an individual chargeable under the head “„salary” exceeds seventy-five per
cent of his taxable income, the rates of tax to be applied shall be as set out in the following Table,
namely:—

S. No Taxable Income Rate of Tax

(1) (2) (3)
Where taxable income does not exceed 0%
1.
Rs. 600,000
2. Where taxable income exceeds 5% of the amount exceeding
Rs. 600,000 but does not exceed Rs. 600,000
Rs. 1,200,000
3. Where taxable income exceeds Rs. 30,000 plus 10% of the
Rs. 1,200,000 but does not exceed amount exceeding Rs. 1,200,000
Rs. 1,800,000
4. Where taxable income exceeds Rs. 90,000 plus 15% of the
Rs. 1,800,000 but does not exceed amount exceeding Rs. 1,800,000
Rs. 2,500,000
5. Where taxable income exceeds Rs. 195,000 plus 17.5% of the
Rs. 2,500,000 but does not exceed amount exceeding Rs. 2,500,000
Rs. 3,500,000
6. Where taxable income exceeds Rs. 370,000 plus 20% of the
Rs. 3,500,000 but does not exceed amount exceeding Rs. 3,500,000
Rs. 5,000,000
7. Where taxable income exceeds Rs. 670,000 plus 22.5% of the
Rs. 5,000,000 but does not exceed amount exceeding Rs. 5,000,000
Rs. 8,000,000
8. Where taxable income exceeds Rs. 1,345,000 plus 25% of the
Rs. 8,000,000 but does not exceed amount exceeding Rs. 8,000,000
Rs. 12,000,000
9. Where taxable income exceeds Rs. 2,345,000 plus 27.5% of the Amount
Rs. 12,000,000 but does not exceed exceeding Rs. 12,000,000
Rs.30,000,000
10. Where taxable income exceeds Rs. 7,295,000 plus 30% of the
Rs. 30,000,000 but does not exceed amount exceeding Rs. 30,000,000
Rs.50,000,000
11. Where taxable income exceeds Rs. 13,295,000 plus 32.5% of the amount
Rs. 50,000,000 but does not exceed exceeding Rs. 50,000,000
Rs.75,000,000
12. Where taxable income exceeds Rs. 21,420,000 plus 35% of the
Rs.75,000,000 amount exceeding Rs. 75,000,000

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The rate of tax to be paid under section 15, in the case of individual and association of person shall be as
follows:-

S. Gross amount of rent Rate of tax

No.
1. Where the gross amount of rent does not Nil
exceed Rs. 200,000.
2. Where the gross amount of rent exceeds Rs. 5% of the gross amount exceeding
200,000 but does not exceed Rs. 600,000. Rs.200,000.
3. Where the gross amount of rent exceeds Rs. Rs. 20,000 + 10% of the gross amount
600,000 but does not exceed Rs. 1,000,000. exceeding Rs. 600,000
4. Where the gross amount of rent exceeds Rs. Rs. 60,000 + 15% of the gross amount
1,000,000 but does not exceed Rs. 2,000,000. exceeding Rs. 1,000,000.
5. Where the gross amount of rent exceeds Rs. 210,000 + 20% of the gross amount
Rs.2,000,000 exceeding Rs. 2,000,000.
6. Where the gross amount of rent exceeds Rs. Rs. 610,000 + 25% of the gross amount
4,000,000 but does not exceed Rs. 6,000,000. exceeding Rs. 4,000,000
7. Where the gross amount of rent exceeds Rs. Rs. 1,110,000 + 30% of the gross amount
6,000,000 but does not exceed Rs. 8,000,000 exceeding Rs. 6,000,000
8. Where the gross amount of rent exceeds Rs. Rs. 1,710,000 + 35% of the gross amount
8,000,000 exceeding Rs. 8,000,000
Rates of tax for securities

TY 2018, TY 2019& TY 2020

Securities Securities
S.
Period acquired before acquired after
No.
01.07.2016 01.07.2016

1. Where holding period of a security is less than 12 15%

months
2. Where holding period of a security is 12 months or 12.5%
15%
more but less than 24 months
Where holding period of a security is 24 months or
3. 7.5%
more but the security was acquired on or after
1.7.2013
4. Where the security was acquired before 1st July, 0% 0%
2013

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