Assignment No. 02 of Taxation Management (FIN623) solution

Assignment # 02 Dated: Jul 08, 10 
Assignment No. 02 of Taxation Management (FIN623) will be uploaded on July 12, 2010. 
Last Date for the Submission of Assignment no. 02 is July 15, 2010. 
Make Sure that you upload the Assignment on VU-LMS of the course before due date. Any Assignment will not be accepted through E-mail after the due date. 
Note: Cheating or copying of Assignment is strictly prohibited; no credit will be given for copied Assignment. 

Best of Luck


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Tax payer: Hamid Tax Year: 2009 
Residential Status: Resident 
Computation of taxable income and tax thereon: 

Particulars Total income Exempt Income Taxable Income
Basic salary 120,000 Nil 120,000
House rent allowance 57,000 Nil 57,000
Utilities allowance 15,000 Nil 15,000
Car maintenance provided 
by the employer ---- ---- 18,000 
Rental income 10,0000 Nil 10,000
Total 220,000 
Tax liability: Tax rate of 0.50% percent as given for taxable income exceeding Rs 180,000 up to Rs 220,000 
Income tax payable: 220,000 x 0.50% = 1100
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FIN623 Assignmnet#02 Solution Idea

Total Income

Taxable Income

Income From Salary

Basic Salary

120,000

120,000

House rent allowance

57,000

57,000

Utilities allowance

15,000

15,000

Car maintenance provided by the employer

18,000

18,000

210,000

210,000

Income from Property

Rental income (10,000 X 12)

120,000

Non-refundable deposit

(W-1)

50,000

50,000

170,000

50,000

Working-1The non-refundable income shall be divided on 10 under the tax law500,000/10=50,000Computation of TaxTotal tax liability under the head “Income from Salary” (0.50%)

1,050Total tax liability under the head “Income from Property” (5%)

2,500Total tax liability

3,550Tax deducted at source

1,000Net tax payable

2,550

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