FIN623 Assignment no 1 Spring 2013 Idea Solution written update
SEMESTER SPRING 2013
TAXATION MANAGEMENT (FIN623)
ASSIGNMENT NO. 01
DUE DATE: 14
TH MAY, 2013
MARKS: 20(16+4)
ASSIGNMENT:
Keeping the taxation mechanism of Pakistan into consideration, you are required to ascertain
either the income in the given scenarios is exempt or not? Support your answer with solid
reasons in the light of Income Tax Ordinance (I.T.O) 2001. (First answer is being provided in the
table for better understanding and presentation of answer.)
(a)
Scenario Exempt
or Not
Reason(s) Section
& Clause
President of Pakistan has
honored Mr. Ahmad with gold
medal and cash prize of Rs.
1,000,000 on his scientific
achievement.
Exempt Any allowance attached to honor,
Award or medal provided by
President of Pakistan is exempt
from tax.
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Profit received by a non-resident
person on security issued by
resident person who is the
associate to non-resident person.
Mr. X and Mr. Y had been facing a
dispute over a piece of
agricultural land since 10 years.
They have resolved their issue
through a compromise in 2013.
Mr. X agreed to receive Rs.
800,000 from Mr. Y. as
compromise on their dispute.
Mr. Taqqi left for USA on 1
st
February 2012. He joined the job
there and stayed there up till 30
th
June 2012. During this period he
earned equivalent to Rs. 500,000.
Mr. Hassan has been given a
scholarship by the Associate to
meet the cost of his education.
Mr. X has divorced his wife and
paid Rs. 1,000,000 as support
payment to live apart under an
agreement.
Mr. David has been working in
Pakistan for the last two years; his
stay is just for the sake of
employment. Mr. David earned
income by established business in
Pakistan.
Mr. Steve is a citizen of Canada.
He is working as Canadian
ambassador, in Islamabad.
Government of Pakistan has also
appointed ambassador, in
Canada. Canadian government
grants exemption on salary of
Pakistani ambassador.
Government of Punjab owned a
Marble factory in Khyber
Pakhtunkhwa (KPK). Income
earned by Punjab government
from the marble factory?
(b)
Ascertain the normal tax year or special Tax year:
Name Account year Tax year
XYZ an insurance company 1
st
Jan 2011 to 31
st
Dec
2012
Mr. X , a manufacturer of shawls 1
st
Apr 2010 to 31
st
Mar
2011
Mr. Y a rice exporter 1
st
Jan 2011 to 31
st
Dec
2012
ABC public company 1
st
Jul 2010 to 30
th
Jun
2011
IMPORTANT:
24 hours extra / grace period after the due date is usually available to overcome
uploading difficulties. 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.
OTHER IMPORTANT INSTRUCTIONS:
DEADLINE:
• Make sure to upload the solution file before the due date on VULMS.
• Any submission made via email after the due date will not be accepted.
FORMATTING GUIDELINES:
• Use the font style “Times New Roman” or “Arial” and font size “12”.
• It is advised to compose your document in MS-Word format.
• You may also compose your assignment in Open Office format.
• Use black and blue font colors only.
RULES FOR MARKING
Please note that your assignment will not be graded or graded as Zero (0), if:
• It is submitted after the due date.
• The file you uploaded does not open or is corrupt.
• It is in any format other than MS-Word or Open Office; e.g. Excel,
PowerPoint, PDF etc.
• It is cheated or copied from other students, internet, books, journals etc.
Note related to load shedding: Please be proactive
Dear students!
As you know that Pre Mid-Term semester activities have started
and load shedding problem is also prevailing in our country.
Keeping in view the fact, you all are advised to post your activities
as early as possible without waiting for the due date. For your
convenience; activity schedule has already been uploaded on
VULMS for the current semester, therefore no excuse will be
entertained after due date of assignments, quizzes or GDBs.
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