Ms. Saima is a telecommunication engineer working with a leading GSM operator as their chief technical officer for the last
Ms. Saima is a telecommunication engineer working with a leading GSM operator as their chief technical officer for the last many years. She has provided you with the following information relating to her assessment for the year ended June 30, 2009.
i. Monthly salary of Rs. 500,000 was paid to her by the company consisting of the following:
Basic Salary 400,000
Medical allowance 40,000
Conveyance allowance 60,000
ii. The salary was credited to her bank account on the 25th of every month. She incurred actual medical expenses of Rs. 100,000 during the year. These expenses were reimbursed to her by the company in accordance with the terms of her employment.
iii. She received a bonus of Rs. 1.0 million.
iv. Apart from her employment with a GSM operator, she also served as a visiting faculty member at a local engineering university and received a total of Rs. 470,000. Ms. Saima incurred an expenditure of Rs. 70,000 towards this service. Withholding tax was deducted from the payments made by the university.
v. In August 2008, she participated and won a quiz competition arranged by Pakistan Urdu Academy. The prize money of Rs. 200,000 was paid to her after deduction of a tax of Rs. 40,000.
vi. She inherited a plot of land from her father on his death in July 2000. On October 1, 2008 she entered into a contract of sale with Mr. Moin for a consideration of Rs. 50.0 million. Mr. Moin paid a deposit of Rs. 1.0 million and agreed to pay the balance within one month of the date of contract. On due date, Mr.Moin defaulted in making the payment upon which Ms. Saima forfeited the deposit in accordance with the terms of the contract. Later on, the plot was sold to Mr. Parkash at a price of Rs. 50.0 million.
vii. Ms. Saima purchased another plot of land for a consideration of Rs. 56 million. She borrowed Rs. 5.0 million from her sister for the purchase of this plot. The amount was received in cash.
viii. Ms. Saima also inherited a painting from her father. The painting was valued at Rs. 500,000. On April 1, 2009 she gifted the painting to her brother who came from Canada after five years. He went back to Canada after staying in Pakistan for a period of two months. The value of the painting was Rs. 1.0 million when it was gifted.
Compute the taxable income of Ms. Saima for the tax year 2009. Give brief reasons under the Income Tax Ordinance, 2001 in support of your treatment of each of the above items.