Assignment No. 1 Taxation Management (FIN623) (19-04-2012)

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SEMESTER SPRING 2012
Taxation Management (FIN623)
Assignment No. 1
Due Date: 19th April , 2012 MaximumMarks:15

Question # 1
For each case mentioned below, identify the agriculture income (if any) along with income chargeable to tax or in case the income is exempted from tax. You are also required to mention the reasons with section(s) of Income Tax Ordinance 2001.

1. Mr. Ali has five acres land being used by Mr. Imran for the cultivation of bamboos and flowers. The land is given on annual rent of Rs. 80,000 per acre. During the tax year 2012, Mr. Ali received Rs. 400,000 from Mr. Imran.

2. Mr. Ali has a building next to his land which was given to Mr. Imran on rent for warehouse. The rent of Rs. 40,000 for this building has been received during the tax year 2012.

3. Mr. Noor has a piece of agricultural land which has been on rent for last ten years, but during the current tax year the land is used as a market place for the sale of agricultural produce of the surrounding areas. Total commission of Rs. 60,000 has been received from the use of such land.

Question # 2
After completing MBA degree you are doing an internship in a tax consultancy firm these days, where you have been given two cases of the “person” in which you have to identify (with reason in case the answer is ‘Yes’) that whether the status of each person is “taxpayer” or not under the Income Tax Ordinance 2001:

1. ABC Limited, a newly incorporated business in Pakistan is exempted from income tax for coming five years starting from tax year 2010.

2. Mr. Raza owns a brand new locally manufactured car of 1300 CC.