Income from property section 15. proper format of property numerical with addition headings. and calculation of income from property

2. Tax Management

3. Income from property (sec.15)

4. Group members
 Hira Nisar K5F15MCOM0002
 Saher Yaseen K5F15MCOM0004
 Zain Chaudhary K5F15MCOM00013
 Ahmad Raza K5F15MCOM002231
 Abdul Rehman K5F15MCOM0008

5. Hira Nisar

6. Contents
 Introduction
 Important Points
 Allowable Deductions from income
From property
 Exempt From Tax
 Format

7. Introduction
Income from property or Rent
chargable to tax (RCT) in the
second source or head of income
as mentioned in sec (11) of the
income tax ordinance. According
to sec 15(1) of the income tax
ordinace, the rent received or
receivable by a person for a tax year,
other than rent exempt from tax, shall
be chargeble to tax in that year under
the head “Income from Property”.

8. Abdul Rehman

9. Important Points
Property: Mean constructed building
Building: Block of bricks or stonework
coved by roof.
Land: Land means vacant (‫)خالی‬ use for
temporary huts of for storing material.
Rent: Means any amount received or
receivable by the owner of the land or
the building.

10. Allowable Deductions from
income From property
Collection Charges.
Any expenditure paid or payable py the
person in the year for the purpose of
collection of rent due in respect of
property the deduction is allowed as 6%
of the rent chargabel to tax or
amount of collection charges which
is less.

11. Allowable Deductions Cont...
Repair Charges.
Where the property is let out and
tenant or owner bear the cost of
repair then the amount of repair will
be deducted form rent.
The deduction is allowed as 1/5
of the rent chargable to tax (RCT)

13. Allowable Deductions Cont...
Insurance Premium.
The amount of premium paid or
payabel by the person for
insured the building from risk is
also deducted from the rent.
And remaing is chargable to
tax.

14. Exempt From Tax
 Income from agriculture building.
 Income from property held under trust.
 Rental value of owner’s occupied
residential property.
 Rental value of owner’s occupied business
property.
 Fair market value is exempt from tax if
following conditions are full filled:
1. Recipient is an individual or AOP
2. Fair market does not exceed Rs. 150,000.
3. Recipient does not receive income from any other heads of income.

15. Saher Yasin

16. Tax Rates of property
 Individual or AOP
S.No TOTAL AMOUNT OF RENT RATE OF TAXES
1 Upto Rs. 150,000 0%
2 Rs. 150,001 to Rs. 1000,000 10% of the amount exceeding
Rs. 150,000
3 Above Rs. 1000,000 15% of the amount exceeding
Rs. 100,000

17. Tax Rates for companies
 Companies
S.NO Total Amount Of Rent Rate Of Taxes
1 Upto Rs. 400,000 5% of total amount
2 Rs. 400,001 to 10,00,000 Rs. 20,000 plus 7.5% of the
amount exceeding Rs. 400,000
3 Amount Exceeding Rs.
10,00,000
Rs. 65,000 (fixed) plus 10% of
amount exceeding Rs.
100,00,000

18. Ahmad Raza Bhatti

19. Information
Rent of building@ Rs. 80,000 per month -----------
Unadjustable deposite received from tenant 800,000
Deductions clamied.
Repair charges 90,000
Fire insurance premium 24,000
Property tax 29,000
Intrest on loan 108,000
Collection charges 36,000
Legal charges for agreement 40,000

20. Format Income from property
Total income from salary 900,000
Rent of buliding (80,000x12) 960,000
Add: unadjustable advance
(800,000x1/10)
80,000
1,040,000
Less: Deduction allowed:
Repair charges (1/5 of Rs. 1,040,000) 208,000
Fire Insurance premium 24,000
Property tax 29,000
Intrest on loan 108,000
Other Expenses.
Collection Charges 36,000
Legal charges for agreement 40,000
76,000
Or 6% of Rs. 1,040,000= Rs 62,400 62,400 (431,400) 608,600
Taxable Income 1,508,600