Mr. Employee - a Chinese citizen joined FMCG in Pakistan on July 1st, 2019, as an engineer. For the year ended

30 June 2020, his data is given below:

1. Basic salary of Rs. 600,000 per quarter.

2. Receipt of medical allowance of Rs. 400,000.

3. FMCG provided him with a car for business and personal use. The car is under finance lease and its fair

market value at the time of lease was Rs. 1,800,000. The total amount of lease rentals to be paid over the

whole lease term was Rs. 2,000,000. Lease rentals paid during the year ended 30 June 2020 were Rs. 250,000.

Mr. Employee was also provided with a fuel allowance of Rs. 50,000 after every 2 months to cover fuel

expenses for his company allocated car. 50% of his travelling was directly related to the business of his

employer.

4. FMCG provided him with accommodation. Had he not been provided with the accommodation he

would have been entitled to receive a house rent allowance at 40% of his basic salary. FMCG also provided

him with the services of a security guard for which FMCG paid Rs. 18,000 per month. Rs. 10,000 was deducted

every month from Mr. Employees salary to pay for the security guard.

5. He received 50,000 shares in FMCG on 1 July 2019 under an employee share scheme at Rs. 10 per

share against a fair market value of Rs. 15 per share. He had the option to transfer the shares on or after 1 July

2019 on which date the fair value was Rs. 30 per share. However, he did not sell any of the shares during the

year ended 30 June 2020.

6. FMCG reimbursed him Rs. 25,000 per month for nine months during the year, being the school fees of

his child. The school also collected tax at Rs. 15,000 which was paid by Mr. Employee from his own pocket and

a tax payment challan was provided to him.

7. FMCG gave him a loan of Rs. 500,000 on 1 August 2019 at a markup of 6% per annum. He used the

loan for furnishing his apartment in China.

8. FMCG provided him with a return ticket to Beijing on the eve of Chinese New Year in February 2020.

The total cost incurred by FMCG on this account was Rs. 150,000. Other information

a. He paid Rs. 50,000 for his annual subscription to the Institute of Engineers in China.

b. FMCG deducted tax of Rs. 940,000 from his salary during the year.

c. Mr. Employee donated Rs. 100,000 through a crossed cheque drawn on his foreign currency account in

Pakistan, to the Beijing University, China. Advance tax of Rs. 15,000 was collected from pre-paid cards used for

his mobile telephone.

d. Required: Compute taxable income and income tax payable by Mr. Employee for tax year 2020.