Question:

Mr. Irfan; an employee of XYZ Ltd.; received a salary during Tax Year 2020 of Rs. 3,000,000. Further information shows that:

1. Out of the above received salary, Rs. 600,000 was advance which is adjustable from salaries of next Tax Years

2. Rs. 300,000 was arrear of the Tax Year 2018 included in above received salary

3. Mr. Irfan has a gardener and a housekeeper to whom he is paying the salary of Rs. 360,000 / annum

4. The company provided him a rent free accommodation. Market rent of that house is Rs. 50,000 per month

5. The company has paid college fee of Rs. 350,000 for Mr. Irfans children

6. A travelling bill of Rs. 600,000 on behalf of Mr. Irfans wife was paid by XYZ Ltd.

7. Mr. Irfan had taken a loan of Rs. 1,000,000 from bank in Tax Year 2011 he has repaid Rs. 900,000 but was not able to pay the last installment of Rs. 100,000. The company has paid this last installment to the bank on behalf of Mr. Irfan.

You have to calculate

1. Basic Salary of Mr. Irfan (02)
2. Taxable Salary of Mr. Irfan for the Tax Year 2020 (08)
3. Tax liability of Mr. Irfan for the Tax Year 2020 by using following rates (05)

Taxable income	Rate of tax
Where the taxable income does not exceed Rs. 600,000	0%
Where the taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000	5% of the amount exceeding Rs. 600,000
Where the taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 1,800,000	Rs. 30,000 + 10% of the amount exceeding Rs. 1,200,000
Where the taxable income exceeds Rs.1,800,000 but does not exceed Rs.2,500,000	Rs. 90,000 + 15% of the amount exceeding Rs. 1,800,000
Where the taxable income exceeds Rs.2,500,000 but does not exceed Rs.3,500,000	Rs. 195,000 + 17.5% of the amount exceeding Rs. 2,500,000
Where the taxable income exceeds Rs.3,500,000 but does not exceed Rs.5,000,000	Rs. 370,000 + 20% of the amount exceeding Rs. 3,500,000
Where the taxable income exceeds Rs.5,000,000 but does not exceed Rs.8,000,000	Rs. 670,000 + 22.5% of the amount exceeding Rs. 5,000,000
Where the taxable income exceeds Rs.8,000,000 but does not exceed Rs.12,000,000	Rs. 1,345,000 + 25% of the amount exceeding Rs. 8,000,000
Where the taxable income exceeds Rs.12,000,000 but does not exceed Rs.30,000,000	Rs. 2,345,000 + 27.5% of the amount exceeding Rs. 12,000,000
Where the taxable income exceeds Rs.30,000,000 but does not exceed Rs.50,000,000	Rs. 7,295,000 + 30% of the amount exceeding Rs. 30,000,000