Problem1. A company has employed Mr. Kumar Singh for several years. He receives a monthly salary of Rs70, 000. He is also entitled to end of year bonus of one-month salary. Mr. Singh is provided with a company car, which he uses to attend duty. It was established that his private mileage is 15% of the total mileage. The car of cylinder capacity of 1,500 cc cost Rs600, 000 inclusive of registration duties. Under the term of his contract, Mr. Singh is also provided with fully furnished house which is owned by his company. On 1st December 2008, Mr. Singh took a 7 year loan of Rs500, 000 from his company. The loan was granted at an interest rate of 5% while the outside borrowing rate was 12%. The loan was used partly to purchase a house located on plot of land of 12 perches (i.e. 506.5 sq meters). He paid municipal rates amounting to Rs1, 560 on 31st January 2009. Mr. Singh has two children. He has a son who is following full-time course at the University of Technology, and a daughter at college. Mr. Singh has some fixed deposits on which he received interest of Rs212, 500 net of tax for year to 30th June 2009. An interest earned by his wife was Rs55, 000 gross and his children earned Rs22, 000 gross. Throughout the year to 30th June 2009, Mr. Singh bought shares from a listed company, from which he received dividends of Rs8, 000. Mr. Singh received the refund of Rs35, 000 gross for sick leave not taken. He also received the net income of Rs63, 750 from part-time lecturing in two equal instalments from another employer. The amount of tax deducted under the PAYE system was Rs6, 300 per month, apart from the month of December 2008 when it was Rs12, 700 and February 2009 when it was Rs11, 000. He has not kept a record of the amount of PAYE deducted from his part-time lecturing. Mr. Singh is a partner in Singha and Associates, which anticipates to make a tax adjusted profit of Rs450, 000 for the year to 30th June 2009. Mr. Singh is entitled to 30% of the profit. Mr. Singh’s wife works as an administrative officer, earning Rs20, 000 per month.
Required:
Question1. Make an income tax calculation showing clearly the total income tax payable by Mr. Singh for the year ended 30 June 2009 as well as the tax liability shown on his income tax return for that year and which was due for payment on 30 September 2009.
Question2. Evaluate the total income tax payable by Mr. Singh’s wife for the income year ended 30 June 2009.