Q1: Mr. Salman, a Pakistani citizen, returned to Pakistan on 30 June 2020 after residing for six years in Norway. On 1 July 2020 he joined a private hospital KKUH and received following emoluments:

Rupees
Basic salary (per month)	500,000
Medical allowance (per month)	60,000
Leave fare assistance	240,000

On 1 January 2021, Mr. Salman resigned from the hospital and joined Dil (Private) Limited (DPL), a company engaged in production of health care and dental products. Mr. Salman received Rs. 3,000,000 from DPL as consideration for joining the company. DPL agreed to pay following emoluments to Mr. Salman for the tax year 2021:

Rupees
Basic salary (per month)	800,000
Medical allowance (per month)	80,000
Utilities allowance (per month)	100,000

On 1 January 2021, DPL provided him with refrigerator, cooking range and washing machine for his use at home. The book value of these appliances was Rs. 200,000 and these were returnable to the company after four years. 15% depreciation was charged by DPL on these appliances.

On 31 March 2021, he was given an option to purchase 2,000 shares of DPL at Rs. 50 per share. The breakup value of the company on that date was Rs. 150 per share.

On 1 April 2021, he received a loan of Rs. 5,000,000 from DPL for the purchase of a house. The profit on loan was payable at the rate of 8% per annum. The prescribed bench mark rate is 10% per annum.

Other information relevant to Mr. Salman for the tax year 2021 is as under:
(i)	On 15 April 2021, he fell ill and was admitted to KKUH where he had been working during his employment. The hospital incurred Rs. 50,000 on his treatment but charged nothing to him.
On 30 April 2021, he received salary arrears of Rs. 900,000 from his ex-employer in Norway.
(iii)		Mr. Salman had 30 acres of agricultural land in Dheer which he did not cultivate himself. During tax year 2021, he received annual rent of Rs. 600,000 from the tenant cultivating the land.
(iv)		On 1 May 2021, he spent Rs. 800,000 on the renovation of his residential house. The entire amount was obtained as a loan from a scheduled bank on which a profit of Rs. 20,000 was paid to the bank during the tax year 2021.
(v)		On 15 June 2021, he received insurance claim of Rs. 600,000 against theft of a painting which was stolen on 31 May 2021. The painting was purchased by him on 1 January 2021 for Rs.350, 000. He had paid insurance premium of Rs. 24,000 and also paid lawyers fee of Rs. 50,000 who represented him in the settlement proceedings.
(vi)		On 15 July 2020, Mr. Salman received 20,000 shares in AB (Private) Limited (ABL), a company incorporated under the Companies Ordinance, 1984 as a dividend in specie. On 30 June 2021, he sold 15,000 shares in ABL for Rs. 425,000. The fair market value of these shares, on the date of issue, was estimated at Rs. 25 per share.

Required

Under the provisions of Income Tax Ordinance, 2001 compute the taxable income and net tax payable for the tax year 2021. Give brief reasons for the treatment of items in (v) and (vi) above. Also explain the treatment of any items that are not appearing in your computation. (8 Marks)

Q2: Hope Limited (UL) is registered under the Sales Tax Act, 1990. The company is engaged in the manufacture and sale of a range of fibre glass products. Following information has been extracted from ULs records for the month of May 2021.

Rupees
Purchases:
Local:
Raw material from registered suppliers	25,000,000
Raw material from un-registered suppliers	10,000,000
Import of raw material	4,000,000
Supplies:
Local:
Taxable supplies to registered persons	20,500,000
Taxable supplies to un-registered persons	9,000,000
Exempt goods	6,000,000
Export to Portugal	12,500,000

Additional information:
(i)	Raw materials purchased from a registered supplier in April 2021 were destroyed by fire. However, UL received full insurance claim of Rs. 1,000,000 against such loss. Input tax paid on such raw material was however adjusted by UL in its April 2021 return.
(ii)	On scrutiny of the companys previous sales tax returns, the internal auditor has pointed out that input tax on raw materials of Rs. 200,000 purchased in October 2020 from a local registered supplier has not been claimed / adjusted by UL.
(iii)	UL under misapprehension collected additional sales tax of Rs. 64,000 from one of its customers. 70% of the goods on which additional sales tax was collected are still lying with the customer as unsold stock.
(iv)	Taxable supplies to registered persons include the following:
Goods worth Rs. 500,000 supplied to AB Limited which is registered as an exporter with the Large Taxpayer Unit.
Supplies of Rs. 2,000,000 to a domestic airline for regular maintenance of an aircraft weighing 8,500 kilograms.
(v)	Raw materials purchased from local registered suppliers include an invoice of Rs. 100,000 which was issued in the name of a director of UL.
All the above amounts are exclusive of sales tax, wherever applicable. Sales tax is payable at the rate of 17%. The value of imported raw material is inclusive of custom duty and federal excise duty. However, other goods are not subject to duty under the Federal Excise Act, 2005.
Required:
In the light of the provisions of Sales Tax Act, 1990 and Rules made thereunder, calculate the sales tax payable by or refundable to UL for the tax period May 2021.