Lahore University of Management Sciences. ACCT 370 Applied Taxation Spring Semester 2018

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1 ACCT 370 Applied Taxation Spring Semester 2018 Instructor Huzaima Bukhari Room No. 441 Office Hours 60 minutes prior to and end of each session. and Telephone Secretary/TA Sec: Malik Imran Abbas/ TA: TBA TA Office Hours TBA Course URL (if any) COURSE BASICS Credit Hours 3 Lecture(s) Nbr of Lec(s) Per Week 2 Duration 75 minutes each Recitation/Lab (per week) Nbr of Lec(s) Per Week Duration Tutorial (per week) Nbr of Lec(s) Per Week Na Duration COURSE DISTRIBUTION Core Elective Open for Student Category Closed for Student Category YES Juniors and finalists. No seniors in the final semester except in extreme circumstances. Seniors are advised to take up this course during Autumn semester. Freshmen and Sophomores COURSE DESCRIPTION The course covers operation of Pakistan s tax system, both direct and indirect with specific reference to: Computation of taxable income under various heads for individuals, partnerships and corporations Calculation of tax liability including computation of various exemptions and reliefs available for different categories of taxpayers. Explanation and application of the principles of General Sales Tax &Federal Excise Tax. COURSE PREREQUISITE(S) ACCT 100 Principles of Financial Accounting ACCT 130 Principles of Management Accounting ACCT 221 Corporate Financial Reporting ACCT 250 Auditing All students are compulsorily required to bring their own books and calculators to the class. Tax laws are ever changing and each year the Finance Act brings in its wake a number of amendments. It is advised to consult the latest law as amended by the Finance Act 2016 for the course and not an earlier version.

2 COURSE LEARNING OBJECTIVES The course aims at giving the students: 1. an opportunity to gain knowledge and understanding in the area of direct and indirect taxes 2. learn application of tax laws related to both business and individuals own tax matters. LEARNING OUTCOMES Upon completion of the course, students will be able to; 1. Demonstrate understanding of both direct and indirect tax laws 2. Apply the acquired knowledge in day to day affairs UNDERGRADUATE PROGRAM LEARNING GOALS & OBJECTIVES General Learning Goals & Objectives Goal 1 Effective Written and Oral Communication Objective: Students will demonstrate effective writing and oral communication skills Goal 2 Ethical Understanding and Reasoning Objective: Students will demonstrate that they are able to identify and address ethical issues in an organizational context. Goal 3 Analytical Thinking and Problem Solving Skills Objective: Students will demonstrate that they are able to identify key problems and generate viable solutions. Goal 4 Application of Information Technology Objective: Students will demonstrate that they are able to use current technologies in business and management context. Goal 5 Teamwork in Diverse and Multicultural Environments Objective: Students will demonstrate that they are able to work effectively in diverse environments. Goal 6 Understanding Organizational Ecosystems Objective: Students will demonstrate that they have an understanding of Economic, Political, Regulatory, Legal, Technological, and Social environment of organizations. Major Specific Learning Goals & Objectives Goal 7 (a) Discipline Specific Knowledge and Understanding Objective: Students will demonstrate knowledge of key business disciplines and how they interact including application to real world situations (Including subject knowledge). Goal 7 (b) Understanding the science behind the decision making process (for MGS Majors) Objective: Students will demonstrate ability to analyze a business problem, design and apply appropriate decision support tools, interpret results and make meaningful recommendations to support the decision maker Indicate below how the course learning objectives specifically relate to any program learning goals and objectives. PROGRAM LEARNING GOALS AND OBJECTIVES Goal 1 Effective Written and Oral Communication Goal 2 Ethical Understanding and Reasoning Goal 3 Analytical Thinking and Problem Solving Skills COURSE LEARNING OBJECTIVES Ethics is an essential element of the course The entire course revolves around the concept of problem solving and honing analytical skills COURSE ASSESSMENT ITEM Quizzes, exams, assignment.

3 Goal 4 Application of Information Technology Goal 5 Teamwork in Diverse and Multicultural Environments Goal 6 Understanding Organizational Ecosystems Goal 7 (a) Discipline Specific Knowledge and Understanding Goal 7 (b) Understanding the science behind the decision making process GRADING BREAKUP AND POLICY Assignment(s): 10% (5% for session highlights and 5% for written answers/analysis to questions/case) Quiz(s): 5% Attendance: 10% Midterm Examination: 30% Final Examination: 45% There would be at least 10 unannounced quizzes out of which 8 best would be considered for grading. There will NOT be any make up quizzes. Anyone missing a quiz will do so at his/her own risk. In insuperable case the average marks obtained by the class in general for that quiz OR the average mark obtained by the student in all his/her quizzes, whichever is lower, would be allotted otherwise the mark would be considered as zero. The same principle would apply to the Mid Term and Final Examination as well. Attendance relates to class discipline covering regularity, punctuality and behavior. Marks will be deducted for violating rules prescribed by the University. Any missed class or part of a lesson, has been observed to have very adverse effects on students, who tend to face difficulty in understanding the subsequent lectures or keeping pace with the class. It is the student s own responsibility to make up for any missed lesson by contacting the instructor or the TA for guidance. EXAMITION DETAIL Midterm Exam Yes/No: Combined Separate: Duration: Preferred Date: Exam Specifications: Yes Combined 2 hours After first 15 sessions Open book. Calculators allowed but not mobile phones Final Exam Yes/No: Yes Combine Separate: Combined Duration: 3 hours Exam Specifications: Open book. Copy of the Withholding Tax Chart from Appendix 1 of the Practical Handbook of Income Tax or copy of power point presentation. Calculators allowed but not mobile phones.

4 COURSE OVERVIEW WEEK/ LECTURE/ TOPICS MODULE Common rules, definitions and concepts related to Income Tax Common rules, definitions and concepts related to Income Tax RECOMMENDED READINGS Introduction to the Federal Tax Laws Sections (Ss) 2,3,4, 5,6, 7, 7A, 7B, 8, 101 from the Income Tax Ordinance, 2001 (ITO) SESSION OBJECTIVE(S) Getting to understand the philosophy of taxation and the modus operandi of imposing and collecting taxes by the government. Getting accustomed to the charge of income tax and legal terms. Some basic concepts & geographical sources of income Provisions governing persons Ss 74, 80 to 84 from ITO Concept of Persons in more detail Classification of income and taxability Ss 9, 10, 11 from ITO Fist Schedule Ss 12, 13, 14, Para (1A) First Salary Schedule, Rules 3, 4, 5, 6 & 7 Salary The above plus Parts I & III of 2 nd Schedule Income From Property Ss 15, 15A & 16 Assessment of companies earning income from property Profits chargeable to tax as 'income from Ss 18, 19 20, 21, 22, 23, 24, 25 & Calculating income from business business' 32. and its related provisions 2 nd Schedule Third Schedule Rules 10 to 13 Broad divisions of income and method of calculating tax for various persons Learning to compute income from salary 9 Profits chargeable to tax as 'income from dobusiness' 10 Profits chargeable to tax as 'income from dobusiness' Income from Capital Gains Ss 37,37A, 38, 68,75, 76, 77, 78& Understanding capital gain and 11 79; First Schedule, clauses 2nd Schedule computing income there from 12 Income from other sources. Ss 39,40 Assessing income from this residual head 13 Tax Credits read with the Second Schedule Ss 61 to 65E & clauses (61) to Learning to compute tax credits (64C) of Part I of 2 nd Schedule for different types of donations 14 Mid Term Examination 15 Rules pertaining to set off & carry forward 56 to 59A only of the ITO Learning the methods of losses 16 Rules pertaining to set off & carry forward 56 to 59A only of the ITO Learning the methods of losses 17 Minimum Tax Ss 113 How it is different from regular income tax

5 18 Advance Tax and Withholding Tax Regime Ss 147 to 169 and Concept of paying taxes in Ss 231A to 236N advance 19 Advance Tax and Withholding Tax Regime 20 Procedure under the income tax law Ss 114, 115, 116, 118, 182, 191, 205 (read with 137(1)) & 119 of Who are liable to file returns and how. the ITO 21 Procedure continued SS 127 to 133 of ITO The appellate procedure 22 Overview, common rules, definitions and concepts of sales tax Ss 1 to 13 & 3 rd 5 th 6 th and 8 th Schedules of the Sales Tax Act 1990 (STO) Learning the essential concepts of indirect taxes Overview, common rules, definitions and 23 concepts 24 Scope and payment of tax Ss 5 to 13 of the STA and Rules Overview, common rules, definitions and Ss 1 to 8 of the Federal Excise Act More forms of indirect taxes 25 concepts of federal excise duty Scope and payment of duty 27 Review & Revision Past work Preparation for final exam 28 Review & Revision TEXTBOOK(S)/SUPPLEMENTARY READINGS 1. Huzaima & Ikram s Federal Tax Laws of Pakistan [official version can also be downloaded from 2. Practical Handbook of Income Tax (27 th Revised Edition) by Dr. Ikramul Haq, published by AA Consultants & Publishers Advance readings/source material: 3. Law & Practice of Income Tax (in 3 volumes), 4. Law & Practice of Sales Tax (in 2 volumes), and 5. Law & Practice of Federal Excise Tax by Mrs. Huzaima Bukhari & Dr. Ikramul Haq, published by AA Consultants & Publishers, #14, 2nd Floor, Sadiq Plaza, The Mall, Tel: & sales@aacp.com.pk website: