FIN623 GDB 1 Solution Spring 2018

Total Marks 5

Starting Date: Thursday, May 17, 2018

Closing Date : Wednesday, May 23, 2018

Status: OpenQuestion

Title: Definitions and Scope of Income

Question Description

  1. Alfa – a debtor of Beta sent a check of Rs. 15,000 on Beta’s advice to one of its creditors – Gamma. Later, Beta duly received receipt confirmation form Gamma. Briefly describe the tax treatment of this amount in the hands of Beta?
  2. M Ltd. has an accounting year of 12 months that ends on 30th November of each year. Determine the tax year of this company for the income year starting on 1st December, 2016 and ending on 30th November, 2017.
  3. Mr. Zia has been residing in a European country since 2010. He returned to Pakistan on 1st April, 2018. In the year 2017-18, his Pakistan-source income was Rs. 800,000 and foreign source income was Rs. 6,000,000. He did not bring his foreign-source income to Pakistan. Determine his taxable income for the Tax Year 2018.
  4. A & B are working in Zee Limited at an annual gross income of Rs. 1 million each. For the FY2017, their employer deducted advanced income tax at the rate of 10% of their income. During the FY2018, their salaries got an annual increment of 20% and the company deducted 20% tax on this income this time. Carefully read the case and identify the tax structure followed in this regard.