- 20 Marks
TAX – May 2018 – L2 – Q1a – Personal Income Tax
Compute the Personal Income Tax payable by an individual based on salary, allowances, pension, and other income details.
Question
Alhaji Tijani Bello is married and has six children aged between 4 and 21 years. All except Phillip aged 21 are still in school. The following details were obtained from his employment records:
(i) He retired from his previous employment with Standard Chartered Company Limited on September 30, 2015. He was on an annual salary of N6,630,000.
(ii) On October 1, 2015, he took up a new employment with Rehoco International Consulting on a salary of N9,600,000 per annum, transport allowance of N480,000 per annum, and rent allowance of N660,000 per annum.
(iii) From October 1, 2015, he will be on a pension income of N960,000 per annum from his pension fund administrators.
(iv) Contributions to the National Housing Fund and National Pension Scheme are N195,000 and N615,000, respectively.
(v) Alhaji Tijani Bello has a Life Assurance Policy on his life with the sum assured of N7,500,000 and an annual premium of N660,000.
(vi) He lived with his wife and two aged parents on whom he spent a total sum of N1,500,000 per annum.
(vii) Alhaji Tijani Bello received dividends from his publicly quoted investment on the Nigeria Stock Exchange as follows:
| Date | Amount (N) |
|---|---|
| 1/1/2014 | 600,000 |
| 1/7/2014 | 720,000 |
Required:
a. Compute the Personal Income Tax payable by Alhaji Tijani Bello for the relevant year of assessment.
Find Related Questions by Tags, levels, etc.
- Tags: Allowances, Dividend income, ersonal Income Tax, Pension, Tax computation
- Level: Level 2
- Topic: Personal Income Tax
- Series: MAY 2018