8531

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD
(Department of Commerce)
TAXATION MANAGEMENT (8531)

CHECKLIST
SEMESTER: SPRING, 2016
This packet comprises the following material:

1.
2.
3.
4.
Text Book (one)

Course Outline
Assignment No. 1, 2
Assignment Forms ( 2 sets )
In this packet, if you find anything missing out of the above mentioned material,
please contact at the address given below:
The Mailing Officer
Allama Iqbal Open University
Sector H-8, Islamabad
Moazzam Ali
(Course Coordinator)
ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD

(Department of Commerce)
[
WARNING
1.
2.
PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING

THE ASSIGNMENT(S) WILL DEBAR THE STUDENT FROM AWARD
OF DEGREE/CERTIFICATE, IF FOUND AT ANY STAGE.
SUBMITTING ASSIGNMENTS BORROWED OR STOLEN FROM
OTHER(S) AS ONES OWN WILL BE PENALIZED AS DEFINED IN
AIOU PLAGIARISM POLICY.
Course: Taxation Management (8531)

Level: M.Com
Total Marks: 100
Semester: Spring, 2016

Pass Marks: 50
ASSIGNMENT No. 1
Q.1 The tax revenues play the key role in meeting the budgetary requirement of a
government. These tax revenues can be collected by imposing different taxes. Can
you explain certain types of taxes imposed in Pakistan by the federal or provincial
governments?
(20)
Q.2 The implement the provisions of the Income Tax Ordinance 2001 and to collect tax
from general public, the federal government has established the institution of the
Federal board of Revenue (FBR). What are the powers and functions of the FBR
under the provisions of the Income Tax Ordinance 2001?
(20)
Q.3
There are certain methods of the payment of income tax in Pakistan. Two most
commonly used methods for business are withholding tax and advance tax. Explain
in detail the provisions of the Income Tax Ordinance 2001 regarding these areas. (20)
Q.4 Calculate the tax liability of Mr. Zohaib from the following data: (Tax rates are
given at the end of the assignment).
(20)
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Item
Basic salary
Conveyance allowance
Utility allowance
Qualification allowance
House facility is provided to Mr. Zohaib. His house
rent allowance entitlement is Rs. 15000 per month
Medical expenses reimbursed
Entertainment allowance
Loan of Rs. 800,000 from employer at 3% interest rate
TV gifted to Mr. Zohaib by his employer
Rent received from property
Amount
40,000 per month
9,000 per month
1500 per month
2,000 per month
25,000 per annum
4,000 per month
Market Value Rs. 35000
35,000 per month
11.
12.
13.
14.
15.
16.
17
Deductions claimed on property income:

Interest expense Rs. 10,000, Depreciation Rs. 15000
Income from fruit store
Sales of shares of public company for Rs. 100,000
after 1 year of acquisition (purchase price Rs. 70,000)
Royalty received
Zakat paid
Donation to a Prime Minister Relief Fund for
Earthquake Victims
Withholding tax paid in the year
Rs. 75,000 per annum

Rs. 35,000 per annum
Rs. 10,000
Rs. 19,000
Rs. 7,000
Q.5 The sales tax is imposed in Pakistan through the Sales Tax Act 1990 on the retail
price of the products. Keeping in pre-view the provisions of the Sales Tax Act
1990, explain the following points:
(5+5+5+5)
a)
Registration of Taxpayers
b)
Record Keeping
c)
Sales Tax Refund
d)
Sales Tax Return
GUIDELINES FOR ASSIGNMENT # 1

You should look upon the assignments as a test of knowledge, management skills, and
communication skills. When you write an assignment answer, you are indicating your
knowledge to the teacher:
Your level of understanding of the subject;

How clearly you think;
How well you can reflect on your knowledge & experience;
How well you can use your knowledge in solving problems, explaining situations,
and describing organizations and management;
How professional you are, and how much care and attention you give to what you
do.
To answer a question effectively, address the question directly, bring important related
issues into the discussion, refer to sources, and indicate how principles from the course
materials apply. You must also be able to identify important problems and implications
arising from the answer.
For citing references, writing bibliographies, and formatting the assignment, APA format
should be followed.
ASSIGNMENT No. 2
This assignment is a research-oriented activity. You are required to select any trading/
manufacturing/ non-trading organization of your interest which supports you in preparing
a report of about 1000 words on the topic allotted to you, to be submitted to your teacher
for evaluation.
Select one of the following topics according to the last digit of your roll number. For
example, if your roll number is P-3427180 then you will select issue # 0 (the last digit): TOPICS:
0.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Sales tax role in total tax collection in Pakistan

Zakat as an alternate to sales tax in Pakistan
Causes of increase in regressive taxation in Pakistan
Tax frauds in the companies of Pakistan
Tax on the incomes of sports players in Pakistan
The future of property tax in Pakistan
FBR, a facilitator or a hurdle in the revenue collection?
Alternate tax dispute resolution
The purpose of green taxes in Pakistan
The benefits of E-Filing system of the FBR
The report should follow the following format:

1.
Title page
2.
Acknowledgements
3.
An abstract (one page summary of the paper)
4.
Table of contents
5.
Introduction to the issue (brief history & significance of issue assigned)
6.
Practical study of the organization (with respect to the issue)
7.
Data collection methods
8.
SWOT analysis (strengths, weaknesses, opportunities & threats) relevant to the
issue assigned
9.
Conclusion (one page brief covering important aspects of your report)
10. Recommendations (specific recommendations relevant to issue assigned)
11. References (as per APA format)
12. Annexes (if any)
GUIDELINES FOR ASSIGNMENT # 2
1.5 line spacing

Use headers and subheads throughout all sections
Organization of ideas
Writing skills (spelling, grammar, punctuation)
Professionalism (readability and general appearance)

Do more than repeat the text
Express a point of view and defend it.
WORKSHOPS
The workshop presentations provide you opportunity to express your communication
skills, knowledge & understanding of concepts learned during practical study assigned in
assignment # 2.
You should use transparencies and any other material for effective presentation. The
transparencies are not the presentation, but only a tool; the presentation is the
combination of the transparencies and your speech. Workshop presentation transparencies
should only be in typed format.
The transparencies should follow the following format:
1)
Title page
2)
An abstract (one page summary of the paper)
3)
Introduction to the issue (brief history & significance of issue assigned)
4)
Practical study of the organization (with respect to the issue)
5)
Data collection methods
6)
SWOT analysis (strengths, weaknesses, opportunities & threats) relevant to the
issue assigned
7)
Conclusion (one page brief covering important aspects of your report)
8)
Recommendations (specific recommendations relevant to issue assigned)
GUIDELINES FOR PRESENTATION
Make eye contact and react to the audience. Don't read from the transparencies or
from report, and don't look too much at the transparencies (occasional glances are
acceptable to help in recalling the topic to cover).
A 15-minute presentation can be practiced several times in advance, so do that until
you are confident enough. Some people also use a mirror when rehearsing as a
substitute for an audience.
WEIGHTAGE OF THEORY & PRACTICAL ASPECTS IN ASSIGNMENT # 2 &

WORKSHOP PRESENTATIONS
Assignment # 2 & workshop presentations are evaluated on the basis of theory & its
applicability. The weightage of each aspect would be:
Theory:
Applicability (practical study of the organization):
60%
40%
COURSE OUTLINE (8531)

UNIT 1
ADVANCE TOPICS IN TAXATION

1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
UNIT 2
INCOME TAX ORDINANCE 2001 WITH RELEVANT RULES

2.1
2.2
UNIT 3
Philosophy of tax
1.1.1 Islamic philosophy of tax
1.1.2 Comparative study of tax under Islam, Judaism and Christianity.
Principles of taxation
Consequences of tax evasion with respect to business entity, and
economy as a whole
Fighting with tax evasion
Tax as a tool of fiscal policy
Tax structure of Pakistan (merits, demerits), Comparative study with
other South Asian developing
Countries and recommendations for improvement
History of tax reforms in Pakistan, Critical review of tax reforms in
Pakistan, Comparative study of tax reforms with other South Asian
Countries
Tax management with special focus on corporate tax
Tax revenue management in Pakistan
Tax base, chargeability, and collection
Comprehension of Basic Rules and Concepts
Basic principles of construction, relevant definitions/concepts
2.2.1 Persons [section 2(42)]
2.2.2 Income [section 2(29)]
2.2.3 Total income (with special debate on distribution of total
income under various heads)
2.2.4 Taxable income [section 2(64)]
2.2.5 Assessment [section 2(5)]
2.2.6 Tax
2.2.7 Taxpayer [section 2(66)]
2.2.8 Tax year [section 2(68)]
2.2.9 Accumulated profit [section 2(1)]
2.2.10 Dividend [section 2(19)]
2.2.11 Industrial undertaking
2.2.12 Permanent establishment [section 2(41)]
2.2.13 Associates
2.2.14 Resident and non-resident persons
TAX ADMINISTRATION
3.1
3.2
Tax authorities [section 207]

Circulars, orders and directions issued by the Federal Board of
Revenue (FBR) [sections 206, 213 & 214]
3.3
3.4
3.5
3.6
3.7
UNIT 4
TAX ON TAXABLE INCOME (I)

4.1
4.2
4.3
4.4
4.5
UNIT 5
Advance rulings [section 206 A].

Appellate System [Sections 127 to 136]
Commissioner Inland Revenue (Appeals)
Appellate Tribunal
Conceptual discussion regarding point of law and point of fact
Heads of income [section 11]
Income for tax purposes [section 9 & 10]
Tax payable on taxable income [First Schedule to the Ordinance]
Salary
4.4.1 Concept of employment, employer, employee and salary
4.4.2 Basis of assessment
4.4.3 Residential status of salaried person
4.4.4 Employee share schemes
4.4.5 Perquisites (benefits-in-kind)
4.4.6 Taxation at source from salary
4.4.7 Retirement benefits (Pension, gratuity, provident fund)
4.4.8 Employment termination benefits
4.4.9 Exemptions and tax concessions regarding salary
Income from Other Sources [Sections 39, 40, 55(1), 67, 89, 101(6), 111]
4.5.1 Concept of other sources under the Ordinance
4.5.2 Allowable deductions
TAX ON TAXABLE INCOME (II)

5.1
Income from property
5.1.1 Concept of property under the Ordinance
5.1.2 Elements of property income
5.1.3 Computation of taxable income and tax payable under the
head property
5.1.4 Exemptions and lower rate taxation of income from property
5.1.5 Method, manner and mode of property tax
5.2
Income from business [Sections 18 to 36]
5.2.1 Concept of business under the Ordinance
5.2.2 Principles regarding chargeable income
5.2.3 General principles for allowable deductions
5.2.5 Deductions allowed [section 20]
5.2.4 Deductions not allowed [Section 21]
5.2.6 Exemptions and tax concessions
5.3
Capital Gains
5.3.1 Concept of Capital Asset under the Ordinance
5.3.2 Principles for computing capital gains
5.3.3 Deduction of losses
UNIT 6
TAX CREDITS AND MINIMUM TAX [SECTIONS 61 TO 65 &

SECTIONS 113 TO 113B]
6.1
6.2
6.3
6.4
6.5
6.6
6.7
UNIT 7
COMPREHENSION OF BASIS, RULES AND CONCEPTS

RELEVANT DEFINITIONS/CONCEPTS
7.1
7.2
7.3
7.4
7.5
7.6
7.7
7.8
7.9
7.10
7.11
7.12
7.13
7.14
7.15
UNIT 8
Set-off and Carry Forward of Losses [Part VIII of Chapter III]

6.1.1 Principles relating to inter-head-adjustments
6.1.2 Rules for carrying forward and subsequent adjustments
Procedure [Parts I and II of Chapter X]
Incomes chargeable as minimum tax
Persons liable to pay minimum tax
Advance Tax & Final Tax Regime (Withholding Tax)
6.5.1 Special focus on section 169
6.5.2 Comparative discussion regarding tax deducted at source
(withholding tax) treated as adjustable, minimum or final tax.
Default Surcharge [Part XII of Chapter X]
Sales Tax Act 1990 with Relevant Rules/Notifications
6.7.1 Overview, Scheme and Scope
Arears
Due date [section 2(9)]
Exempt supply [section 2(11)]
Goods [section 2(12)]
Manufacturer or producer & Manufacture or produce
Input tax [section 2(14)]
Registered person [section 2(25)]
Supply [section 2(33)]
Tax [section 2(34)]
Tax Invoice
Taxable activity [section 2(35)]
Taxable supply [section 2(41)]
Zero rated supply
Tax period [section 2(43)]
Time of supply [section 2(44)]
SCOPE AND PAYMENT OF TAX [SECTIONS 3 TO 13 WITH

RELEVANT RULES]
8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
Scope of chargeability, mode of collection etc

Zero rating
Change in the rate of tax
Time and manner of payment
Determination of tax liability
Tax credit not allowed
Debit and credit note
Excess amount to be carried forward or refunded
8.9
8.10
8.11
UNIT 9
Assessment of tax
Short-paid amounts recoverable without notice
Exemption
RETURNS,
REGISTRATION
AND
AUTHORITIES
[SECTIONS 26, 27, 28 WITH RELEVANT RULES]
9.1
Returns
9.1.1 Normal Return
9.1.2 Annual return
9.1.3 Special Return
9.1.4 Final Return
9.2
Registration (Sections 14, 21, with relevant rules)
9.2.1 Requirement of registration
9.2.2
Compulsory registration
9.2.3 De-registration
9.3
Authorities
(Sections 30, 30A, 30B, 30C, 30D, 30DD, 30E, 31, 32
and 32A)
Recommended Books:
1.
2.
3.
A Text Book of Business Taxation by Ijaz Ali Waince, published by Waince

Academy, Faisalabad.
Huzaima & Ikrams 'Tax Laws of Pakistan' [Official version can be downloaded
from www.fbr.gov.pk
Practical Handbook of Income Tax by Dr. Ikramul Haq, published by Lahore
Law Publications email: info@huzaimaikram.com
Website: http://huzaimaikram.com
Advance Readings / Source Material:

1.
2.
3.
4.
5.
Business Taxation by Mozzam Ali Tarar published by Azeem Academy, Lahore

Synopsis of taxation by Mirza Munawar Hussain
Various articles on tax laws and issues available at http://huzaimaikram.com
Material at official website (www.fbr.gov.pk) of FBR
Reforms in Tax Administration of Pakistan, report by Syed Shahid Hussain,
www.google.com
SCHEDULE OF TAX RATES FOR THE TAX YEAR 2015-16

FOR SALARIED PERSONS
S. No
(1)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Taxable Income
(2)
Where the taxable income does not exceed Rs. 400,000
Where the taxable income exceeds Rs. 400,000 but does
Rate of Tax
(3)
0%
2% of the amount
not exceed Rs. 500,000

exceeding Rs. 400,000

Rs. 200 + 5% of the amount
not exceed Rs. 750,000


Rs. 14,500 + 10% of the amount
not exceed Rs. 1,400,000

Where the taxable income exceeds Rs. 1,400,000 but

Rs. 79,500 + 12.5% of the amount
does not exceed Rs. 1500,000

exceeding Rs. 1,400,000

Rs. 137,500 + 17.5% of the amount
does not exceed Rs. 25,00,000


Rs. 137,500 + 17.5% of the amount




Rs. 359,500 + 22.5% of the amount




Rs. 597,000+27.5% of the amount
does not exceeds Rs. 70,00,000

Where the taxable income exceeds Rs. 7,000,000
10

Rs. 14,22,000 + 30% of amount

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ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD

TAXATION MANAGEMENT (8531)

This packet comprises the following material:

Text Book (one)

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD

PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING

Course: Taxation Management (8531)

Semester: Spring, 2016

Deductions claimed on property income:

Rs. 75,000 per annum

GUIDELINES FOR ASSIGNMENT # 1

Your level of understanding of the subject;

Sales tax role in total tax collection in Pakistan

The report should follow the following format:

GUIDELINES FOR ASSIGNMENT # 2

1.5 line spacing

Professionalism (readability and general appearance)

GUIDELINES FOR PRESENTATION

WEIGHTAGE OF THEORY & PRACTICAL ASPECTS IN ASSIGNMENT # 2 &

COURSE OUTLINE (8531)

ADVANCE TOPICS IN TAXATION

INCOME TAX ORDINANCE 2001 WITH RELEVANT RULES

Tax authorities [section 207]

TAX ON TAXABLE INCOME (I)

Advance rulings [section 206 A].

TAX ON TAXABLE INCOME (II)

TAX CREDITS AND MINIMUM TAX [SECTIONS 61 TO 65 &

COMPREHENSION OF BASIS, RULES AND CONCEPTS

Set-off and Carry Forward of Losses [Part VIII of Chapter III]

SCOPE AND PAYMENT OF TAX [SECTIONS 3 TO 13 WITH

Scope of chargeability, mode of collection etc

A Text Book of Business Taxation by Ijaz Ali Waince, published by Waince

Advance Readings / Source Material:

Business Taxation by Mozzam Ali Tarar published by Azeem Academy, Lahore

SCHEDULE OF TAX RATES FOR THE TAX YEAR 2015-16

not exceed Rs. 500,000

exceeding Rs. 400,000

not exceed Rs. 750,000

exceeding Rs. 500,000

not exceed Rs. 1,400,000

exceeding Rs. 750,000

does not exceed Rs. 1500,000

exceeding Rs. 1,400,000

does not exceed Rs. 25,00,000

exceeding Rs. 18,00,000

does not exceed Rs. 25,00,000

exceeding Rs. 25,00,000

does not exceed Rs. 3,999,000

exceeding Rs. 25,00,000

does not exceed Rs. 35,00,000

exceeding Rs. 3,000,000

does not exceed Rs. 40,00,000

exceeding Rs. 35,00,000

does not exceeds Rs. 70,00,000

exceeding Rs. 4,000,000

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