02-20-2011, 04:58 PM
Dear Faisal
Example 1 #
Taxable Income ------------- 2,800,000
Tax on Tax (2.8m x 0.16)---- 448,000
Taxable Income before Tax ------------ 2,800,000
Perquisite (Tax Paid by Employer) ---- 448,000
Taxable income after tax ------------- 3,248,000
Tax Rate ----------------------------- 17.5%
Ab 2,800,000 ager taxable income ho toh humey phele sey pata chal giya k tax on tax ka jab impact aaiga toh automatically slab change hoga. Toh iseliye mainey 17.5% lailiya from beginning.
However, Tumhare tareeqey sey bhi answer wohi aaiga but mera tareeqa short hai.
Example 2 #
Taxable Income (Before Tax on Tax) ----------------- 2,400,000
Tax (16%) ------------------------------------------ 384,000
Tax on Tax (384,000/0.84) -------------------------- 457,143
Taxable Income inclusive of Tax on Tax ------------- 2,857,143
Ab slab change hogiya wapis (2,857,143 > 2,850,000) so ab humey shuru sey apni calculation kerni paregi but now on 17.5 % not on 16%
Taxable Income (before Tax on Tax) ---------A------- 2,400,000
Tax (17.5%) --------------------------------C------- 420,000
Tax on Tax (408,000 / 0.825) ---------------B------- 509,091
Taxable Income (after tax on tax) -------(A+B)------ 2,909,091
Tax paid by employer (2,894,545 x 0.175)----D------- 509,091
Thus, B = D
Ab hum tax authority ko batainey k Taxable Income is 2,909,091 and we paid tax to 'tax authority' is 509,091 which is equal to employer amount.
This same calculation is also approved by Tax partner KPMG
Conclusion
Tax on Tax k do step hotey hai
Phela first identify Tax Rate jo may be change hosekta hai
Second 'Gross up kerna' with same rate jo step one main calculate kiya.
may be it will clarify u.
warmest regards
Example 1 #
Taxable Income ------------- 2,800,000
Tax on Tax (2.8m x 0.16)---- 448,000
Taxable Income before Tax ------------ 2,800,000
Perquisite (Tax Paid by Employer) ---- 448,000
Taxable income after tax ------------- 3,248,000
Tax Rate ----------------------------- 17.5%
Ab 2,800,000 ager taxable income ho toh humey phele sey pata chal giya k tax on tax ka jab impact aaiga toh automatically slab change hoga. Toh iseliye mainey 17.5% lailiya from beginning.
However, Tumhare tareeqey sey bhi answer wohi aaiga but mera tareeqa short hai.
Example 2 #
Taxable Income (Before Tax on Tax) ----------------- 2,400,000
Tax (16%) ------------------------------------------ 384,000
Tax on Tax (384,000/0.84) -------------------------- 457,143
Taxable Income inclusive of Tax on Tax ------------- 2,857,143
Ab slab change hogiya wapis (2,857,143 > 2,850,000) so ab humey shuru sey apni calculation kerni paregi but now on 17.5 % not on 16%
Taxable Income (before Tax on Tax) ---------A------- 2,400,000
Tax (17.5%) --------------------------------C------- 420,000
Tax on Tax (408,000 / 0.825) ---------------B------- 509,091
Taxable Income (after tax on tax) -------(A+B)------ 2,909,091
Tax paid by employer (2,894,545 x 0.175)----D------- 509,091
Thus, B = D
Ab hum tax authority ko batainey k Taxable Income is 2,909,091 and we paid tax to 'tax authority' is 509,091 which is equal to employer amount.
This same calculation is also approved by Tax partner KPMG
Conclusion
Tax on Tax k do step hotey hai
Phela first identify Tax Rate jo may be change hosekta hai
Second 'Gross up kerna' with same rate jo step one main calculate kiya.
may be it will clarify u.
warmest regards