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9.1 INCOME FROM PROPERTY Notes Questions With Solutions

The document contains 5 practice questions regarding the taxation of income from property in Pakistan. Question 1 calculates the tax liability for an individual with income from salary and rental property. Question 2 does the same for an individual with salary, business income, and rental income. Question 3 also calculates total tax liability considering income from salary, business, and rental property. Questions 4 and 5 deal specifically with calculating tax liability for income derived solely from rental property.

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841 views5 pages

9.1 INCOME FROM PROPERTY Notes Questions With Solutions

The document contains 5 practice questions regarding the taxation of income from property in Pakistan. Question 1 calculates the tax liability for an individual with income from salary and rental property. Question 2 does the same for an individual with salary, business income, and rental income. Question 3 also calculates total tax liability considering income from salary, business, and rental property. Questions 4 and 5 deal specifically with calculating tax liability for income derived solely from rental property.

Uploaded by

HASNAT SABIR
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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INCOME FROM PROPERTY

PRACTICE QUESTIONS (Page # 24)

Question # 1
Ms. FH
Individual
Tax Year 20XX-XX

Income from Salary:

Basic Salary 100,000*12 1,200,000


House Rent Allowance 40,000*12 480,000
Utilities Allowance 15,000*12 180,000
Car was provided for personal use only then= 1,000,000 *10% 100,000

Total Salary Income= 1,200,000+480,000+180,000+100,000 1,960,000


Tax Liability= 90,000 + 160,000 *15% 114,000

As per law income from property is treated as separate block of income or Separate Tax Regime
(STR)
Income from Property:

Monthly Rent = 50,000*12 600,000


Advance not adjustable= 600,000*10% 60,000
Rent chargeable to Tax (RCT) = 600,000+60,000 660,000
Tax Liability = 20,000 + 60,000*10% 26,000

Calculation of Total Tax Liability:

Total Tax Liability = 114,000 + 26,000 140,000


Advance Tax deducted by ABC Limited (26,000)

Tax Payable= 140,000-26,000 114,000


Question # 2

Mr. Farooq
Individual
Tax Year 20XX-XX

Income from Salary:

Basic Salary 50,000*12 600,000


House Rent Allowance 10,000*12 120,000
Conveyance Allowance 10,000*12 120,000
Medical Allowance 6,000 *12 72,000
Medical Allowance is exempt up-to 10% of basic salary 600,000*10% (60,000)

Medical Allowance to be added in taxable salary income 12,000


Total Salary Income= 600,000+120,000+120,000+12,000 852,000

Total Business Income 1,200,000


Total Taxable Income 2,052,000
Status 852,000/2,052,000*100= 41.5% (Non-Salaried)

Tax Liability= 70,000+852,000*15% 197800

As per law income from property is treated as separate block of income or Separate Tax Regime
(STR)
Income from Property:

Monthly Rent = 60,000*12 720,000


Advance not adjustable= 700,000*10% 70,000
Rent chargeable to Tax (RCT) = 720,000+70,000 790,000
Tax Liability = 20,000 + 190,000*10% 39,000

Calculation of Total Tax Liability:

Total Tax Liability = 197,800 + 39,000 236,800


Advance Tax deducted by XYZ Limited (39,000)

Tax Payable= 140,000-26,000 197,800


Question # 3

Mr. Haris
Individual
Tax Year 2018-19

Income from Salary:

Basic Salary =40,000*11 440,000


Education Allowance= 5,000 *11 55,000
Entertainment Allowance= 6,000 *11 66,000
House Rent Allowance= 20,000 * 11 220,000 or
45% of basic salary= 440,000 *45% 198,000
Higher of HRA to be added in taxable income 220,000
Total Salary Income= 440,000 + 55,000+ 66,000 + 220,000 781,000

Taxable Business Income= 1,200,000


Total Income= 781000+1200000 1,981,000
Less: Zakat= (5,000)

Total taxable income= 1,976,000


Status: 781,000/1,981,000 *100= 39% (Non-Salaried)
Tax Liability= 70000+ 776000*15% 186,400

Income from Property:

Monthly Rent = 60,000 * 6 360,000


Advance not adjustable= 700,000*10% 70,000
Rent chargeable to Tax (RCT) 430,000
Tax Liability= 0+ 230,000*5% 11,500

Calculation of Total Tax Liability:

Total Tax Liability= 186400+11,500 197,900


Less: Advance Taxes paid / deducted:
From Salary= 8,000
Tax paid on cell phone= 3,000
Tax deducted from rent= 11,500
Total deductions: (22,500)

Tax Payable= 197,900- 22,500 175,400


Question # 4

Mr. Father
Individual
Tax Year 2019-20

Income from Property:

Monthly Rent = 60,000 * 6 360,000


Advance not adjustable= 700,000*10% 70,000
Rent chargeable to Tax (RCT) 430,000
Tax Liability= 0+ 230,000*5% 11,500
Less: Advance Tax deducted from rental income (11,500)
Tax Payable= 0

Question # 5

Ali, Umair & Hassan


Equal Shareholders
Tax Year 2019-20

Income from Property:

Monthly Rent = 60,000 * 6 360,000


Ali 120,000
Umair 120,000
Hassan 120,000
Advance not adjustable = 700,000 * 10% 70,000
Ali 23,333
Umair 23,333
Hassan 23,333

Taxable income and Tax liability of Ali

Taxable income = 120,000+23,333 143,333


Tax Liability 0

Taxable income and Tax liability of Umair

Taxable income = 120,000+23,333 143,333


Tax Liability 0
Taxable income and Tax liability of Hassan

Taxable income = 120,000+23,333 143,333


Tax Liability 0

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