Mr. Waqar, aged 45 years, is working as a Chief Financial Officer (CFO) in a listed company, Taraqqi Limited (TL). The company is engaged in the manufacture of iron rods for the local market. He derived following emoluments during the tax year ended June 30, 2018:

Basic salary (per month)                                                  Rs.  250,000

Cost of living allowance (per month)                                       50,000

Other Compensations: In addition to the above emoluments, Mr. Waqar was also provided with the following:

1. Special bonus equal to one month's basic salary paid on June 05, 2018.
2. A new company maintained car for his personal use. The car was purchased on March 01, 2018 at a cost of Rs. 1,800,000. However, the cost of the car would have been Rs. 3,000,000 had the company obtained it on finance lease.
3. A fully furnished accommodation in a posh area of Karachi. The fair market value of the rent was estimated to be Rs. 80,000 per month.
4. On July 15, 2017, he received 15,000 shares in MZ (Private) Limited, a company incorporated under the Companies Act, 2017. On June 30, 2018, he sold 10,000 shares in MZ for Rs. 250,000. The fair market value of these shares, on the date of issue, was estimated at Rs. 22 per share.
5. On June 15, 2018, he received insurance claim of Rs. 500,000 against theft of a painting which was stolen on May 31, 2018. The painting was purchased by him on January 01, 2011 for Rs. 300,000. He has paid insurance premium of Rs. 25,000 and also paid lawyer's fee of Rs. 50,000 who represented him in the settlement proceedings.
6. Mr. Waqar received additional income from the following sources, for the tax year 2018.
7. Brokerage fee of Rs. 100,000 in connection with the transfer of an apartment. The brokerage fee was received in cash. Mr. Waqar incurred an expense of Rs. 20,000 in connection with the above deal.
8. Zakat of Rs. 25,000 has been deducted by the bank.
9. Annual rent of Rs. 960,000 from letting out a building to KF Enterprises. Following expenses were also incurred by Mr. Waqar in relation to the building:

• Repairs (per annum)                                                Rs. 200,000
• Fire insurance premium (per annum)                            30,000

10. Interest of Rs. 15,000 was paid on a loan obtained for building renovation by creating first charge on the building in favour of a scheduled bank.

 Additional Information: Other related information is as under:

1. TL deducted withholding tax of Rs. 600,000 from Mr. Waqar's salary during tax year 2018.
2. On July 01, 2017, Mr. Waqar acquired a life insurance policy and paid a premium of  Rs. 500,000. He also contributed Rs. 1,600,000 to an approved pension fund. On January 01, 2018, Mr. Waqar purchased shares of Abrar Limited, a listed company, as an original allottee for Rs. 200,000.
3. During the tax year 2017, his assessed taxable income was Rs. 3,000,000.

Required: Under the Income Tax Ordinance, 2001 and Rules made thereunder, compute the taxable income and income tax payable by or refundable to Mr. Waqar for the tax year ended June 30, 2018     

Answer rating: 100% (QA)

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