corporate tax_ prob_assignment -2

7/26/2019 Corporate Tax_ Prob_Assignment -2

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Perquisite-Related Problem-1 Expenditure by Employer

Items of Salary Mr. A Mr. B Mr. C Mr. Mr. E

Basic Salary [BS] 900,000 840,000 720,000 600,000 480,000

House Rent Allowance 240,000 216,000 168,000

Meical Allowance !0,000 !0,000 2",000 20,000 1",000

#on$eyance Allowance !2,000 !2,000 2",000 17,000%ntertain&ent Allowance 2",000 2",000 20,000 18,000 10,000

'ele()one Bill ",000 4,000 !,"00 !,000 1,"00

*t)er +tility Bill 7,"00 6,"00 6,000 ","00 4,000

o&estic 'ra$el Allowance 2",000 2!,000 21,000 19,000 17,000

-orei.n 'ra$el Allowance//s(ent y e&(loyer

2"0,000 22",000

-esti$al Bonus 1"0,000 140,000 120,000 100,000 80,000

3ncenti$e Bonus// 12",000 100,000

ea$e %ncas)&ent 20,000

ea$e -are Assistance "0,000 40,000 !0,000

*$erti&e 10,000

%&(loyer5s #ontriution to R- 10 o BS 90,000 84,000 72,000 60,000 48,000

'rans(ort or oice (ersonal use 70,000 6",000 "",000Rent:ree Acco&&oation 420,000

Acco&&oation at #oncessional Rent !00,000

!"!A# $%1$&%'(( 1%)*+%'(( 1%,,$%'(( 1%1(%'(( &((%'((

Employees Contribution to/

Reco.ni;e ro$ient -un R- 10 o BS 10 o BS 10 o BS 10 o BS 10 o BS

A((ro$e Su(erannuation -un AS- 2 o BS

is0losed profit by Employer 1,200,000

A0tual forein tra2el expense

3spent by employee4240,000 1"0,000

A0tual rental 2alue 400,000 !24,000

Rent paid by Employee 24,000

Actual Meical %


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Solution/

Perquisite Expenditure by Employer Perquisite by Employer

Items of Salary Mr. A Mr. B Mr. C Mr. Mr. E

Basic Salary [BS]

House Rent Allowance 240,000 216,000 168,000

Meical Allowance !0,000 !0,000 2",000 20,000 1",000

#on$eyance Allowance !2,000 !2,000 2",000 17,000

%ntertain&ent Allowance 2",000 2",000 20,000 18,000 10,000

'ele()one Bill ",000 4,000 !,"00 !,000 1,"00

*t)er +tility Bill 7,"00 6,"00 6,000 ","00 4,000

o&estic 'ra$el Allowance 2",000 2!,000 21,000 19,000 17,000

-orei.n 'ra$el Allowance// 187,"00 168,7"0

-esti$al Bonus

3ncenti$e Bonus// ",000 0

ea$e %ncas)&ent

ea$e -are Assistance

*$erti&e

%&(loyer5s #ontriution to R- 10 o BS

'rans(ort or oice (ersonal use 70,000 6",000 "",000Rent:ree Acco&&oation 420,000

Acco&&oation at #oncessional Rent !00,000

!"!A# )(*%((( '+%$'( ,*(%'(( ,(%'(( $,$%'((

Maximum Perquisite per Employee $'(%((( $'(%((( $'(%((( $'(%((( $'(%(((

Perquisite disallo5ed u6s ,(3e4 ''*%((( +(+%$'( 1$(%'(( '%'(( nil

-orei.n 'ra$el Allowance isallowe u=r 6" $%'(( '%$'(

Problems on Corporate !axation/ A7 $(11-1$

Problem 8 C!-1

')e train. an (roit an loss accounts o >)an #o? t?, a (ri$ate li&ite co&(any notenlistedwit) any stoc@ e


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2 aw c)ar.es inclue '@? !",000 (ai as co&(ensation or inEury recei$e y a (erson run o$er y

one o t)e irectors o t)e co&(any w)ile co&in. to t)e oice? ')e car elon.s to t)e co&(any?

'a< aut)ority treate it as t)e irectorFs (ersonal e


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Sour0e of in0ome Amount 3!a;a4 !ax 3!a;a4

i$ien inco&e 9!,"00 G 20 [(ai at source] 2!,!7"*t)er inco&e 22,20,000 G 27?" [(ai as a$ance] 610,"00

!otal in0ome $,%1,%'(( !otal tax payable u6s *+ ,,%)*'

'a< (ai on t)e asis o return ,,%)*'

8 ')e co&(any (ai i$ien G 12 wit) res(ect to t)e last inco&e year? 3ts accu&ulate (roit an

ree reser$e u( to t)e en o t)e last inco&e yearwere '@? 2"1,278 an '@? !,700,000 res(ecti$ely?

Required/ #alculate total inco&e an ta< (ayale y t)e co&(any or t)e rele$ant assess&ent year?

Problem 8 C!-,

Dreen Ban.laes) t? is a (ulicly trae co&(any )a$in. (ai:u( ca(ital o '@? 9,000,000? ')e net

(roit o t)e co&(any was '@? 1,8"0,000 or t)e last inco&e year? *n scrutiny, t)e ollowin. acts were

re$eale

1 Accountin. e(reciation as (er auite accounts was '@? "40,000, ut it s)oul e '@?

499,200 as (er ')ir Sc)eule?

2 'ele()one %

corporate tax_ prob_assignment -2

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