Practice Question

Practice Question
Mr. D has following Income for the year:
Mr. Y has following Income for the year:
=
-

- -

- Property Income of 55,000 -

-

- Trading Income of 25,000

- -

- Trading Income 25,000 ~

- =
Dividend Income 28,000
-

- Dividend Income 15,000 -

- Property income 15,000

- =

Tax Payable?
-
-

Tax Payable?
-

Income Tax Return Income Tax Return

Dividend Non
Non
Saving Saving Dividend

Property , 000
55
Trading , 000
25
- &
- -

25 ,000
Trading , 000 Dividend
-
&
-
&
28

Dividend 15
Property
-
&

,
000 -
15 000
S

Total 80. 000 15 000 , Total 40 .

000 28 ,
000

Personal Allow .
(12 570)
.
·

Personal Allow (12 570) ,

Taxable 67 430
,
15 ,
000 Taxable 27 430 .
28 , 000

T
N/5 : 67 430,
37 700.
X 20 % = 7540 : 27 430
.
27 430
. x 20 % : 5486

29 730 x 40 %: 11 892 Div . : 28 .000 500 X 0 % = O

, .

67 430
,
9770 X875%: 855

, 000
15 500 X 0% P 37 700
Div
=
,
.:

14 500
.
x 33 75%:·

4893 17 , 730 x 33 75 %:
.
5984

Tax 24 325
liability ,
12 ,325
 Saving Income Practice Question No. 7 Practice Question No. 8
Interest income earned
by an individual
during a Mr. N has following Incomes during the year:
-

Mr. N has following Incomes during the year:

-
-

tax head
classified ofSaving
is in income . - Pension Income of 16,500
year -
-
Employment Income of 53,000
-

Income from Bank Interest is 14,500

>
-

- Trading Income 15,500

Tax
ofSaving
-
rates incomes are : = - -

- Dividend Income 13,500 - Income from Bank Interest is 16,500

Dividend
-

- Dividend Income 10,000

Saving
=

#
Tax Payable?
-
Basic Rate band = 1 37,700 20 % 20 % .75 %
8 Tax Payable?
40 % 40%
Income Tax Returns
33 75 %
Rate band 125 140
Higher 37 70 .
-
: ,
,

-
Additional Rate band : 125 141 ,
& 45 % 45% 39 .
35 % Non
Saving Saving Dividend Income Tax Return
53 Dividend
Employment Saving Saving
-
-
000
Non
·
,

In tax rate band Bank interest 14 500 Pension

Saving
-

income Of is available -
- - -
16 500
,
T -

Dividend 13 500 15 500

8: Trading
T =>
& -
- ·
, ,

El tax
payer Total 53 14 500 13 500 16 500
if
basic rate Interest
person
-

,
000 a is 000 , .
-
-

,
T

E500 person is
higher
rate tax
payer Personal Allow (12 570) Dividend 10
if
-
a ·
=>
T
,
000
.
,

to additional rate tax Taxable 40 430 + 14 500 + 13 500 Total 16 500

if person payer
-

a is ,
32 10 000
,
000
,
. ,

Additional % band 68 430 Pers (12 570)

for saving
-
0 is availatule income =
,
. Allow .

Tax Taxable 19 430

first E5,
lies taxable + 16 500
I saving
income in
of ,
000 ,
, + 10,000

income . This 0% band is available on initial [5, 000 #s : 40 430 ,

37 700
-
,
x 20% = 7540 =
43930
it to 40 % tax
of
taxable income
if
relates
Saving income . 2730 * 1092
Higher
rate
=
·

14 500
Interest income is taxed on receipt basis
Saving 500 X 0 % = O t500-0 % band
- -
= ,

Interest National and 14 40 %= 5600 TY

Saving certificates
income 000 X

from
-

Individual tax. 13 500 500 0 % D N/S 19 430 19 430 3886

Saving
X X 20 %:
Account income Div
exempt from
is .
=
,
=
:
,
,

There investment 13 33 75%: 4387 500 X0 % 0

is limit in National
Saving 000 x
Saving 16 500
.
=
no
·

.
: ,

16
Certificate ,
000 X 20 % =
3200

-
However in ISA maximum investment is20 000. ,
18619 Div .: 10 ,
000 500 X0 :
0

1270 X 8 75 %:
.

111

37 700 ,

8230 X 33 75 %: .

2777

9974
Practice Question No. 9 Practice Question No. 10
Mr. N has following Incomes during the year: Mr. N has following Incomes during the year:
-

- Property Income of 27,000 - Pension Income of 17,000

-

Exempt
-

- Bank Interest 29,000

- -

- Interest Income from National Saving Certificate 6,000

- - -
-
-

-
-

Dividend Income 7,000

-

- Bank Interest 32,000 - -

-
- Dividend Income 19,000 -

Tax Payable?
-

Tax Payable?
-

Income Tax Return Income Tax Return

Non
Saving Saving Dividend Non
Saving Saving Dividend
Pension
Property 27 , 000 17 000
& = ②
·
=
·
,

29 , 000 National Jaw Cert

Interest
- -
· S . =
- -

Dividend -
↑
Too ·
Bank interest T
32 000
&

Total 29, 000 Tood 19,000

27, 000 Dividend
T

A
-

Personal Allow .
(12 57)
,
Total 17 , 000 32 , 000 19 ,
000

Taxable 14 430 , t 29, 000 + 7000 Personal Allow .

(12 570) .
-

50 430 rate Taxable 4430 t t 19 , 000

Higher
=
,
>
-
32 000 ,

0% band : 500 55 430-

Higher
-

=
,

Tax
-
-

to
is : 14 43014 430
,
,
x 20 %: 2886 Tax
=

Sav : 29 000 ,
500 X 0% = O N1 =
4430 4430 X 20 % = 886
22 , 770 X 20 %: 570
4554 0 %
Saving : 32 000
X -
-
,

37 700
,
-
5000

5730 X 40 %: 2292 500 X 0% = O

-

Dir . : Tooo 500 X 0% =

0 30 930 ,
x 20 %: 6186

6500 x 33 75 %:
.
2193 Div : 19 ,
000 500 X0 % = 0

11 925
,
770x8 75%: 67 .

37 700 ,

337559
17 730
,
x
 Qualifyling
Practice Question Practice Question loan interest Expense
Mr. N has following Incomes during the year: Mr. N has following Incomes during the year: If
thatow Qualifying
- -
- - -
-
an individual takes a loar purpa
-

- Trading Income 7,000 - Employment Income 4,000 then interest

- &

-
-

Income from property 3,000

-

expense on
- Employment income of 2,000 -

Exempt deductable
-

total
-

- Interest Income 30,000

-

income.
- Interest Income from Individual Saving Account 3,000
from
-

- -
= - -

- Interest income 25,000 - Dividend Income 12,000 its

If loan in
not loan
a
qualifying then
=> -

a
= - -

- Dividend Income 19,000

=
-
Tax Payable? deductable
against
interest expense is
only income
of
-

Tax Payable?
Income Tax Return
-

The
activity to which that loan relates.

Income Tax Return Won

Saving Saving Dividend -

Qualifying purposes
include:

Non
Saving Saving Dividend
Employment 4000
1 Loan taken to invest Partnership OR
=

in
- =

Trading Too
Property 3000 Sole Trader business
- - -
- ·

Employment Interest taken to

give
to
2000 =
- &
30 000 -

Loan Sole
2 own
·
·
,

Ind . Sav .
All & T

- Dividend -
-
12 ,
000
Trader
I O Partnership business

Interest 25,000 Total Toop 30 12 taken to Plant &

3
. Loan
purchase Machinery
000
-
-

000
-
,
,

Dividend 19 ,000 Pers Allow (700d (5570)

for Employment purpose.
#
- -
.

Total 9000 19 Taxable D t 24 430 + 12, 000

taken to Plant
, 000
25 ,
000 , 4
: Loan purchase &
Machinery
Pers Allow (9000) (3570) 36 . 430 -

Basic business
for
=
.
own
-
-

Taxable 0 + 21 430 , + 19 000 ,

Tax
T

40 0
= .

430-higher- N/S : O

Tax Saving 5000 0 % O

: 24 430 ,
=

O O 1000 0% 8
NIS X =
=

21 430 5000 X0 % 18 430 20%

Saving : , = 0 .
x = 3686

500x0 % = 0
Div . : 12 ,000 500 x 0 % = O

15 930,
x 20 % = 3186 11 500
.
x 8 75 %
.
=
1006

Dividend : 19 000
,
500x0 % =
0 4692
, 778
15 x 8 75 %:
.

1379
37 700
,

2730 x 33 75 %:
.
921

5486
Practice Question No. 11: Practice Question No. 12
Mr. G has following data for the year:
- - - Mr. A has following data for the year:
- Employment Income 18,000
- -
- Trading Income 19,000
- Interest Income Bank 22,000 - Interest Income 25,000
saving Certificates 14,000 Exempt
-
-

- Interest Income from National

= = - -
-

- Interest Income from Individual Saving Account 3,000

- Dividend Income 12,000 - Dividend Income 16,000
=> Expense ①
-

v
- Interest paid on loan to acquire Plant for
- - - - Interest Expense paid on loan to invest in partnership 4,000
Employment for business 2,900 = -

Tax Payable?
-

Tax Payable?

Income Tax Return Practice Question No. 13

Dividend Mr. B has following data for the year:
Nor
Saving Saving
- Employment Income 12,000
Employment 18 X -

000
-

- Interest Income 18,000

·
Interest inc .
- 22 ,0 0 0 -

- Dividend Income 22,000

Cert
- Interest Expense paid on loan to invest in Partnership business
National Sav
②
=
-
. -

for purchase of plant and machinery 4,000

.

-
Dividend -
=
12 ,
000
Tax Payable?
Total 18 .
000 22 ,
000 12 000 ,

loan (2900)
Qualifying
interest
expense
Net income 15 100 22 ,
000 12 000
.

Pers .
Allow (12 570) ,

Taxable 2530 + 22 ,000 + 12 , 000

= 36 530
.

B
Tax
is : 2530 2530 X 20 % = 506

247P X0 % 0
Saving 22,000 =
:

5000

1000 X 0% : O

18 , 530 x 20% : 3706

12 000 500 -0 0
Div .: ,
:

11 500
,
x 8 75%:
.

1006

528