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+--- Thread: advance tax (/thread-advance-tax)
advance tax - 7221 - 04-26-2006
AOA
i am writing an example case of advance tax please advice the best solution.
ABC is a carriage company, charge Rs.75,000/- for delivering 35000 KGs of XYZ material from karachi to lahore. due to negligence of carriage company 15 KGs of material is lost. at the time of payment the payee's company deduct the amount of 15 KGs of material (e.g. price of material is Rs. 40/KG) and advance tax as well. there are two ways to calculate the tax
1.
Freight Charges 75,000
Panelty 15*40 (600)
net payable 74,400
advance Tax @ 2% (1488)
Net payment 72912
2.
Freignt Charges 75,000
Advance Tax @ 2% (1500)
Net payable 73,500
Panelty 15*40 (600)
Net Payment 72,900
Which is the correct way as per tax treatment and accounting treatment as well.
Regards.
- Muhammad Adnan Arshad - 04-29-2006
there are some error(s) in the example, written by you.....!!
- 7221 - 04-29-2006
have u read the whole case.
i don't think so that u have read it carefully
- massoodakhter - 04-30-2006
AoA,
your first option is correct, for reference please read the relevent secion of ito2001 153(1)(b) 2%of the PAYMENT and not the gross liability.
- Muhammad arif - 05-13-2006
in my opinion that the first one is correct the relevent section of income tax ordinance 2001 153(1)(b)2% of the payment and not the gross liability. if u need income tax rules of 2005 for the class of b.com are available
- 7221 - 05-13-2006
another point for discussion in the above posted example is the correct accounting treatment is offsetting allowed such offsetting of amount as per IAS's.
- amin - 06-12-2006
<blockquote id="quote"><font size="1" face="Verdana, Tahoma, Arial" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by 7221</i>
<br />AOA
i am writing an example case of advance tax please advice the best solution.
ABC is a carriage company, charge Rs.75,000/- for delivering 35000 KGs of XYZ material from karachi to lahore. due to negligence of carriage company 15 KGs of material is lost. at the time of payment the payee's company deduct the amount of 15 KGs of material (e.g. price of material is Rs. 40/KG) and advance tax as well. there are two ways to calculate the tax
1.
Freight Charges 75,000
Panelty 15*40 (600)
net payable 74,400
advance Tax @ 2% (1488)
Net payment 72912
2.
Freignt Charges 75,000
Advance Tax @ 2% (1500)
Net payable 73,500
Panelty 15*40 (600)
Net Payment 72,900
Which is the correct way as per tax treatment and accounting treatment as well.
Regards.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
AOA
I m Amin from Faisalabad
Advance tax is payable on gross amount @2%. So tax is deducted on Rs.75000 as it is Rs.1500.