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Test 3-RA-Income From Property

The document outlines a taxation scenario involving Wasim and Waqar, detailing their income from property rentals, expenses incurred, and other financial transactions for the tax year 2025. It includes specific figures related to rental income, maintenance costs, and a sale of a commercial plot. The task requires calculating their total income, taxable income, and tax liability according to the Income Tax Ordinance, 2001.

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emanjaffar394
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52 views1 page

Test 3-RA-Income From Property

The document outlines a taxation scenario involving Wasim and Waqar, detailing their income from property rentals, expenses incurred, and other financial transactions for the tax year 2025. It includes specific figures related to rental income, maintenance costs, and a sale of a commercial plot. The task requires calculating their total income, taxable income, and tax liability according to the Income Tax Ordinance, 2001.

Uploaded by

emanjaffar394
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Certificate in Accounting and Finance Stage Examinations

Principles of Taxation (IFP)


Q.1
(i) Wasim owns a building, which is 40% occupied for its business. Remaining 60% is on let out on rent to a office. The
following information is available in relation to this building.
Rupees.
Annual letting value of the property owned 3,800,000
Rent Received from tenant 3,000,000
Municipal Charges (Paid by tenant) 120,000
Lawyers fee for suit to recover rent 60,000
Repair and Maintenance expenditures 357,500
Depreciation under third schedule of the ordinance 75,000
Accrued rent from TY 2023 no more receivable 300,000
Fixed tax paid to local authority 35,000
Signing amount (non refundable) 100,000
Rent received include Rs. 900,000 for 3 years commencing from July 01 of the current year.
Wasim received Rs. 3,000,000 as non adjustable security deposit from the tenant on 01 July, 2024 which is used to
repay non adjustable security deposit of Rs. 2,000,000 to previous tenant, received in the month of November, 2021.

(ii) Wasim and Waqar are business partners. They decided to jointly buy a house in Multan. Wasim has 65% share in
the house. On 1 November, 2024, the house was let out to Mr. Asim at monthly rent of Rs. 700,000 with Rs.
5,000,000 received as Non Adjustable Security Deposit. Due to some unavoidable circumstances, Mr. Asim vacated
the house on 28 February, 2025.
The house was let out to Mr. Zafar from 1 April, 2025 at a monthly rent of Rs. 720,0000 with Rs. 3,000,000 received
as non Non Adjustable Security Deposit.
During the Tax year 2025, the owners incurred the following expenditures in relation to the house.
Rupees.
Repair and Maintenance 560,000
Insurance Premium 250,000
Administrative Expense 340,000
Property Tax 150,000
(iii) Wasim owns a commercial plot in Lahore. On 31 December, 2024, he decided to sell the plot to Rashid for Rs.
6,500,000 and received a deposit of Rs. 650,000 . On 1 June, 2025, he forfeited the deposit on refusal of Rashid to
purchase the plot.
(iv) During the year, Wasim made following payments:
Zakat of Rs. 200,000 under Zakat and Usher Ordinance, 1980
Zakat of Rs. 100,000 to deserving relatives in the month of Ramzan.
(v) Waqar has also earned income from business of Rs. 9,120,000 during the year.
Required:
Under the provisions of Income Tax Ordinance, 2001 and Rules made thereunder, compute the total income,
taxable income and tax liability of Waseem and Waqar for the Tax Year 2025.
(Marks 21)
(THE END)

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