CMA SEPTEMBER-2022 EXAMINATION

MANAGEMENT LEVEL
SUBJECT: R2. TAXATION

Model Solution
Solution of the Question No. 2
(a)
Total Income from Salary is Tk. 791,000
Total tax liability is Tk. 48,650
Total Investment is Tk. 231,000
Eligible amount of investment is TK. 158,200
Rebate on investment is Tk. 23,730
Net tax liability is Tk. 24,920.

(b)
Income Year 2018-19
Income from other sources Tk. Tk.
Dividend from pubic Ltd Company 5,5000 5000
Less: Exempted -50,000
Interest on FD 3,000
Interest on Post Saving bank 2,000
Remuneration of exam committee 1,000
Prize of winning Prize bonds lottery 30,000
Sale of fish of pond 1,000
Income from copyright and royalty 4,000
Remuneration as director 15,000
Income from license 2,000
Unexplained investment 125,000
188,000
Less: Allowable deductions
License renewal fee 200
Interest on loan 800 -1000
187,000
Total Income is Tk. 447,000
Tax Liability:
Gross Tax = Tk. 4,850
Tax Rebate on investment= Tk. 4,000
Net Tax liability = TK. 850.
So, Minimum Tax liability = Tk. 5,000
TDS = Tk. 11,500
Net Tax Liability = (Tk. 6,500)

(c)
Yes and Tk. 415 (Tk. 14000 X 2% X 1.5 months).

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(d)
Participants Output VAT Input VAT VAT liability
Manufacturer =[80,000*(15/115)] =[15,000*.15] =Tk. 8,185
=10,435 =2,250
Whole seller =[1,00,000*(15/115)] =10,435 =2,608
=13,043
Retailer =[1,25,000*(15/115)] =13,043 =3,261
=16,304

(e)

Gross Income Exemption Taxable

Income from Bangladesh 2,000,000 2,000,000
Foreign Income:
Income from Sweden 700,000 700,000
Income from Russia 1,200,000 1,200,000
Income from Singapore 350,000 350,000 0
3,900,000

Tax Liability
300,000 0% 0
100,000 5% 5,000
300,000 10% 30,000
400,000 15% 60,000
500,000 20% 100,000
2,300,000 25% 575,000
Gross Tax 770,000
Tax Relief 375,128.2
Net Tax Liability 394,871.8

Average Tax Rate 0.197436

Calculation of Tax Relief

Income from Russia 236923.1
Income from Sweden 138205.1
375128.2

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 SECTION C

Solution of the Question No. 3

Mr. Mazumder
Income Year: 2021-2022; Assessment Year. 2022-2023
Calculation of taxable income
Tk. Tk. Tk.
1. Income from Salary (section: 21)
Basic Salary 204,000
Medical allowance 14,400
Less: Lower of 120,000 or 10% of BS 20,400 -
Festival bonus (18,000 +16000) 34,000
Performance bonus (18,000 x 3) 54,000
House rent allowance 129,600
Less: Lower of 20,000 pm or 50% of BS -102,000 27,600
Dearness allowance (204,000 @ 5%) 10,200
Employer's contribution to RPF 20,400
Interest from RPF 12,000
Less: lower of Interest @ 14.50 or 1/3 of basic salary 12,000 -
Conveyance Facility 60,000
Entertainment allowance (950 x 12) 11,400
Advance salary (18,000 x 2) 36,000 457,600
2. Income from Securities (section: 22 & 23)
Interest from tax exempt government securities 6,100
Less: exemption (full) 6,100 -
Interest from taxable govt. securities (gross) 5,000
Less: Admissible expenses —
Bank charge (4,750 x 1,350 / 27,000) -238 4,762
Interest from debentures 17,000
Less: Admissible expenses –
Bank charge (16,150 x 1,350 / 27000) 808
Interest on borrowed fund 600 1,408 15,592 20,354
3. Income from House property (section - 24)
Annual value (residential part):
Actual rental value (9,000 x 12 x 3) 324,000
Add: Owner's expenses paid by the tenants 24,000
348,000
Municipal value 337,500 348,000
Annual value (higher one)
Annual value (commercial part):
Actual rental value (9,000 x 12) 108,000
Municipal value (675,000 x 1 / 6) 112,500
Annual value (higher one) 112,500
Annual value of the house 460,500
Less: Admissible expenses:
Repair & maintenance 120,750
City corporation tax 3,200
Insurance premium 2,000
Land revenue paid 2,000

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 Mortgage interest paid 2,500
Interest paid to HBFC 4,000
Vacancy allowance 24,167 158,617 301,883
4. Income from other sources (Sec 33 & 34):
Sale of forest timber 32,000
Interest on fixed deposit 13,800
Income from writing column in newspaper 500 46,300
Total Income 826,137

Calculation of Tax Liability:

Tax Liability
350000 0% 0
100000 5% 5000
300000 10% 30000
76,137 15% 11420.55
20% 0
25% 0
Gross Tax 46420.55
-Investment tax credit 15% 24,135
Net Tax Liability 22,286
-TDS 14,480
Surcharge 20% 4457.11
Net tax liability 12,263

Eligible Investment = Tk. 160,900

Solution of the Question No. 4:

Calculation of Total Income

Income From business

Net profit as per IS 5000000
Add: Admissible expenses
Salary 1000000
Free Sample distribution 50000
Provision for bad debt 500000
Director’s commission 100000
Technical fee 200000
Donation to Dhaka University 800000
Travel expenditure 500000
Sales promotion 200000
Entertainment 174000
Income Tax 2400000
5924000
Add: Expenditure to be considered as per ITO
Depreciation 3200000
Less: Non-Business Income
Interest 1000000
Dividend 2500000
Gain on sale of Land 2000000

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Gain on sales of shares 1500000
7000000
Less: Admissible expenses as per the ITO
Depreciation 2000000
Bad Debt 100000
2100000
Income from Business 5024000
Non-Business Income
Capital Gain
Gain on sale of Land 2000000
Gain on sales of shares 1500000
3500000
Income from other sources
Interest 1000000
Dividend 2500000
3500000
Total Income 12024000

Calculation of Tax Liability

On Capital Gain on Land 2000000 15% 300000
On Dividend Income 2500000 20% 500000
On Capital Gain on Share 1500000 10% 150000
On Rest Amount 6024000 20% 1204800
Gross Tax Liability 2154800
Less: tax rebate on CSR -80000
Net tax Liability 2074800
Minimum Tax 120000000 0.60% 720000
Applicable Net Tax 2074800
Add: Additional Tax on foreign Employee 50% 1037400
Additional Tax on Stock Dividend 10% 100000
Additional Tax for excess reserve 10% 370000
Total Tax Liability 3582200
Less: TDS and Advance Tax 1000000
Net Tax Liability 2582200

* End of Question Paper *

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