Harry is employed as marketing manager by Famous Ltd since 1 July 2020. He has provided you with the following information and asks you to explain his taxation position. (i) His basic salary is Rs 1

Harry is employed as marketing manager by Famous Ltd since 1 July 2020. He has provided you with the following information and asks you to explain his taxation position.(i) His basic salary is Rs 1,400,000 per annum plus an end of year bonus of 15 % of his annual salary. He also receives an allowance of Rs 5,000 per month to be spent exclusively in providing business entertainment.(ii) He has the sole use of a fully furnished house rented by the company for him and his family. The company pays a monthly rent of Rs 25,000 for the house.(iii) The company provides him with a new 2500 cc car costing Rs 2.2 million and all his running expenses including servicing, fuel and insurance (estimated at Rs 240,000 per annum) will be paid. He estimates that his annual mileage will be 40,000 kms, broken down as follows:10% – unconnected with business10% – travel from home to company’s office and back80% – on business(iv) The company contributes to an approved medical scheme to provide for medical expenses for its employees. The cost attributable to Harry is Rs 16,875.(v) He takes his meal in the company’s canteen together with all other employees. No charge is made to employees, though the meals would cost approximately Rs 100 per day in a restaurant.(vi) Harry had, in July 2020, paid Rs 15,000 to the employment agency who found him that position in consideration of special advice and assistance given by the agency and subscriptions of Rs18,000 for one year to a recognized professional marketing body and Rs 22,000 for one year’s subscription to a golf club where he expects to meet business acquaintances. He also paid Rs 30,000 for new clothing of a standard considered necessary for the marketing manager of Famous Ltd.(vii) He and his wife Megan expect to pay mortgage interest of Rs 200,000 p.a on a bank loan of Rs 2.5m used exclusively for the purchase of land to be used for the construction of their residence.(viii) Harry and Megan also expect to pay school fees of Rs 60,000 p.a. in respect of their son who attends a private primary school. These fees are largely covered by bank interest of Rs 70,000 credited to Megan’s bank savings account.(ix) Megan is employed as a full-time secretary at a salary of Rs 450,000 p.a. plus an allowance of Rs 50,000 to cover the costs incurred for a child minder to look after their infant daughter.Based on the above information you are required to prepare an estimate of the income tax liability for a full year of Harry and his wife Megan for the year of assessment 2021/22 (i.e., income year ended 30 June 2021). You should give in your answer concise but clear explanations of your treatment of their income, benefits and payments.