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Solution 1

Sunshine Traders, a resident entity for the tax year 2025, reported a net profit of Rs. 6,000,000 with a total taxable income of Rs. 6,061,462 after adjustments for inadmissible expenses. The total tax liability calculated under NTR is Rs. 1,817,658, with additional liability under FTR amounting to Rs. 75,000. After deducting previously paid taxes, the final tax payable is Rs. 117,658.

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21 views2 pages

Solution 1

Sunshine Traders, a resident entity for the tax year 2025, reported a net profit of Rs. 6,000,000 with a total taxable income of Rs. 6,061,462 after adjustments for inadmissible expenses. The total tax liability calculated under NTR is Rs. 1,817,658, with additional liability under FTR amounting to Rs. 75,000. After deducting previously paid taxes, the final tax payable is Rs. 117,658.

Uploaded by

danishbuttca
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Sunshine Traders

Resident Status: Resident


Tax Year: 2025
Calculation of Taxable income and Tax Liability
NTR
Particulars Rs. Rs.
Income from Business
Net profit 6,000,000
Add: Inadmissible Expenses\ Admissible income
Raw Material
20% x 40,000,000 = 8000,000
Actual Amount = 18,000,000 which ever is lower 8,000,000
Accounting Depreciation 15,000,000
Income Tax deducted 1,200,000
Repair Bill Paid in Cash 400,000
Unverifiable bill 200,000
Bonus Paid in cash 400,000
Entertainment Expense (Allowed) -
Penalty Imposed by the customer (Allowed) -
Penalty Imposed by sales tax department 250,000
Commission to ATL Distributor (Allowed) -
Non ATL Commission (350,000/3%*2.8%) 326,667
Provision for doubtful debt and provision for gratuity
(600,000+800,000) 1,400,000
Scientific Research 600,000
Expenses for training (Allowabale) -
P/A Balance of Tax Year 2021 900,000
Pre commencement 600,000
29,276,667
Less: Admissible Expenses\ Inadmissible income
Advance against sale (7,000,000)
Lease Rental Allowable
(Principal + Interest = Rental) -
Bank Profit (net of tax) (425,000)
Bad Debt Recovery (125,000)
Bad debt expense allowed (175,000)
Tax Depreciation (18,000,000)

Adjustment of closing stock to be valued at net realizable


value [19,700–17,500{3500(3,800–300) × 5,000}] (2,200,000)
Normal Depreciation on Vehicle not plying for hire
Actual Amount 9,000,000 or
7,500,000 which ever is lower =(7,500,000x15%) (1,125,000)
Initial allowance and Depreciation on imported machine from
china (not put into use) -
Amortization on Intangible (1,200,000/8x 110/365) (45,205)
Pre-Commencement (600,000/5) (120,000)
(29,215,205)
Income from Business 6,061,462
Calculation of Tax Liability
Particulars Rs.
Upto 5,600,000 1,610,000
Amount Exceeding 5,600,000
(6,061,462 - 5,600,000) X 45% 207,658
Tax Liability under NTR 1,817,658
Tax Liability under FTR (425,000/85% x 15%) 75,000
Less: Income Tax deducted =1,200,000
Income Tax Paid on Imports =500,000
tax deducted for profit on debt = 75,000 (1,775,000)
Tax Payable 117,658

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