Umeshi Osodo was employed by Metal Max Ltd. as a human resource manager with effect from 1 January 2012. He reported the following incomes for...

      

Umeshi Osodo was employed by Metal Max Ltd. as a human resource manager with effect from 1 January 2012. He reported the following incomes for the year ended 31 December 2012
1. Basic salary Sh. 80,000 per month (PAYE Sh. 12,000 per month).
2. The employer paid his annual life insurance premiums at an amount equivalent to 5% of his annual basic salary.
3. He earned a net interest income of Sh. 150,000 during the year from his investments in housing development bonds.
4. The employer provided him with a house whose market rental value was Sh. 50,000 per month.
The employer deducted 5% of his basic salary per month as nominal rent.
5. Education fees for his two children amounting to Sh. 180,000 were paid by the employer during the year.
This amount was charged in the employer's income statement.
6. The employer reimbursed him for all out of pocket expenses incurred on the official use of his personal car.
In the year 2012, the amount reimbursed amounted to Sh. 180,000. He had purchased the car in the year 2010 at a cost of Sh. 900,000. The car had an engine capacity of 1600 cc.
7. He contributed Sh. 28,000 per month to a registered pension scheme. The employer contributed Sh. 18,000 per month for him to the same scheme.
8. He received entertainment allowance amounting to Sh. 40,000. He utilized the amount in celebrating his birthday together with his family.
9. He received a year-end bonus payable to executive staff of Sh. 80,000
10. The employer provided him with electricity, water, telephone and a cook at a cost of Sh. 15.000, Sh. 9,000, Sh.60,000 and Sh. 18,000 per month respectively.
11. During the year UmeshiOsodo was declared the best employee and the employer paid him a reward of Sh. 100,000.
12. He received medical benefits amounting to Sh. 420,000 from the employer. The company has a medical scheme for all staff members.

Compute the following for the year ended 31 December 2012:
i) Taxable income for Umeshi Osodo.
ii) Tax liability (if any) on the income in (i) above.

  

Answers

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Wilfykil answered the question on February 13, 2019 at 10:03

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