Q. 3 (a) Mr. Azhar is a financial expert and working as finance manager of ZAMGA (PVT) Limited. During the financial year 2018, his emolument package includes followings:

Pay Rs. 60,000 p.m.

Bonus Rs. 150,000.

Leave encashment Rs. 70,000.

Mr. Azhar is provided with a car of 1,300cc. The said car was purchased in the last year for a consideration of Rs. 600,000. Running and maintenance cost of the said vehicle is borne by employer. The said vehicle is being used partly for the private and partly for business use.

Mr. Azhar is provided with a furnished accommodation of 1000 square yards in Lahore and company bears rent of Rs. 20,000 p.m. of the said accommodation.

The company also bears the cost of utility bills of Mr. Azhar home. The sum of total bills of electricity, gas and water aggregates to Rs. 85,000.

The salary paid in respect of the cook and guard appointed on the residence of Mr. Azhar aggregates to Rs. 15,000 p.m.

According to the terms of employment, the company bears all the medical expenses of Mr. Azhar. Total expenses incurred on this account aggregates to Rs. 75,000.

The company also provided air tickets & other expenses worth Rs. 85,000 for Mr. Azhar and his family trip to UAE for summer leaves.

During the year, Mr. Azhar was deputed to Islamabad for the month of December 2017 in order to resolve certain administrative issues. He was paid a relocation allowance of Rs. 35,000 in addition to his normal salary.

The company granted Mr. Azhar an interest free loan for a sum of Rs. 1,500,000 on 1 January, 2018.

Mr. Azhar tendered his resignation to the company on June 29, 2018 and he was paid a sum of Rs. 120,000 on account of gratuity from the unapproved gratuity fund on the said date.

Mr. Azhar accepted the offer of M/S ABC (Pvt.) Limited to join that organization and he received a sum of Rs. 75,000 as inducement allowance on account of leaving the past employer.

Required:

Compute the taxable income and tax liability of Mr. Azhar for the tax year 2018 by considering tax rates given in the tax card of 2021 given below.

(b) What is assurance and how it is provided through audit? Discuss the various level/categories of assurance related to the reliability of the financial statements. Also discuss the five elements of assurance engagement.

(The question is of Auditing and Taxation and it consists of 25 marks so do it according to it please and as soon as possible)

Section 149 Salary (Where salary income exceeds 75% of the taxable income) Up to 600,000 0% 600,001-1,200.000 5% of the amount above 600,000 1,200,001-1,800,000 30.000+10%of the amount above 1,200,000 90,000 + 15% of the amount above 1.800,001-2,500,000 1.800,000 195,000 + 17.5% of the amount above 2,500,001-3,500,000 2.500,000 370.000 + 20% of the amount above 3,500,001-5,000,000 3,5,000,000 670.000 +22.5% of the amount above 5,000,001-8,000,000 5,000,000 1.345.000+25% of the amount above 8,000,001-12,000,000 8,000,000 2.345,000+27.5% of the amount above 12,000,001-30,000,000 12,000,000 7.295,000+30% of the amount above 30.000,001-50,000,000 30,000,000 13,295,000+32.5% of the amount above 50,000,001-75,000,000 50.000.000 21.420.000+35% of the amount above Above 75.000.000 75,000,000 Section 149 Salary (Where salary income exceeds 75% of the taxable income) Up to 600,000 0% 600,001-1,200.000 5% of the amount above 600,000 1,200,001-1,800,000 30.000+10%of the amount above 1,200,000 90,000 + 15% of the amount above 1.800,001-2,500,000 1.800,000 195,000 + 17.5% of the amount above 2,500,001-3,500,000 2.500,000 370.000 + 20% of the amount above 3,500,001-5,000,000 3,5,000,000 670.000 +22.5% of the amount above 5,000,001-8,000,000 5,000,000 1.345.000+25% of the amount above 8,000,001-12,000,000 8,000,000 2.345,000+27.5% of the amount above 12,000,001-30,000,000 12,000,000 7.295,000+30% of the amount above 30.000,001-50,000,000 30,000,000 13,295,000+32.5% of the amount above 50,000,001-75,000,000 50.000.000 21.420.000+35% of the amount above Above 75.000.000 75,000,000