- 8 Marks
TAX – May 2019 – L2 – Q3b – Personal Income Tax (PIT)
Identify the tax authority for Mr. Muhammed and calculate his income tax liability based on salary and deductions.
Question
In 2016, Mr. James Muhammed lived at Ojodu Abiodun village, Ogun State and worked for the Federal High Court, Ikeja, Lagos State, on an annual salary of N1,600,000. Mr. Muhammed contributes to an approved pension scheme at the appropriate rate of 8% and also pays a life assurance premium equivalent to 5% of his annual salary.
Required:
(i) Identify the relevant tax authority to which he will be subjected to tax. (2 Marks)
(ii) Compute his personal income tax liability for the relevant assessment year. (6 Marks)
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