IFOS

Question 1

Name incomes included in Head “Income From Other Sources”

Answer 1

Income of every kind received (cash basis) by a person in a tax year if it is not included in any other head shall be chargeable to Tax under the head IFOS including;

Criteria for classifying an income under the head IFOS;

-it must be income as per definition of income.
-it is not chargeable under any other head
-it is not exempt from tax.
-it does not fall under final tax regime.

Question 2

Dividend as IFOS?

Answer 2

If dividend received is foreign source income it is chargeable under the head IFOS.

Question 3

Give 8 incomes which lie under head IFOS

Answer 3

1-Dividend (from foreign source income)
2-Royalty
3-Profit on debt ( interest income )
4-Additional payment on delayed refund under any tax law
5-Ground rent
6-rent from the sub lease of land or a building
7-income from the lease of any building together with plant or machinery

Question 4

Name More incomes which lie under head IFOS?

Answer 4

8- income from provision of amenities, utilities or any other service connected with rent of building
9- any annuity or pension

10- any prize Bond or winnings, lottery prize, winning a quiz, prize offered by companies for promotion of sale or cross-word puzzles

11- any amount received for the provision, use or exploitation of property, including the grant
of a right to explore natural resources
12-the FMV of benefit received for provision, use or exploitation of property

Question 5

Describe consideration received for vacating the possession of a building as IFOS?

Answer 5

Any amount received by a person as consideration for vacating the possession of a building, reduced by any amount paid by the person to acquire possession of building shall be chargeable under the head IFOS in the tax year in which it is received and the following 9 tax years in equal proportion.

Question 6

When gift (except cash) will be treated as income from other source?

Answer 6

FMV of any property received without consideration or received as gift will be chargeable under the head IFOS however if gift is received from relatives it will not be included in IFOS.

Question 7

Loan, advance ,deposit for issuance of shares and gift(cash) as IFOS?

Answer 7

Any amount received as:

-loan
-advance
-deposit for issuance of shares or
-gift

By a person in a tax year from another person (not being a banking company or financial institution) otherwise than by:

-across the checked drawn on a bank or
-banking channel from a person holding a national tax number

Shall be treated as IFOS for the taxier in which it was received

Question 8

Describe tax on profit on debt (interest income )?

Answer 8

1: A tax shall be imposed, at 15%, on every individual and aop who receives the profit on debt from a prescribed person for example from Bank government or National saving scheme.

2: the tax shall be computed by applying the rate of tax on the gross amount of profit on debt.

3: this section shall not apply to a profit on debt that,
-is exempt from tax
-Exceeds rupees 5 million

Question 9

Tax treatment if profit on debt exceeds 5 million?

Answer 9

If profit on that exceeds 5 million (for individual or AOP) it would be taxable under normal tax regime under the head income from other sources.

Question 10

Tax treatment If profit on debt is earned through loan agreement? ( Not from govt, banks, National Schemes)

Answer 10

If interest is earned through loan agreement then it is taxable under NTR in case of all persons (individual, AOP company) under the head income from other source.

Question 11

Text treatment of profit on debt on behbood saving certificate / pensioners benefit account?a

Answer 11

Profit on that on Bahbood saving certificate / pensioners benefit account is taxable under NTR with maximum tax rate @5%.

Question 12

Tax treatment for companies profit on debt?

Answer 12

For companies profit on debt falls under NTR chargeable under income from other source.

Question 13

What deductions are allowed in computing income chargeable under the head IFOS?

Answer 13

In computing the income under the head IFOS, a deduction shall be allowed for any expense paid by the person if the expenditure is paid in deriving income. However no deduction will be allowed for an expenditure of capital nature.

Question 14

Describe Deductions allowed from lease of building together with plant and machinery,?

Answer 14

A person receiving income from lease of building together with plant and machinery shall be allowed

-A deduction for the depreciation of any plant machinery or building used
-An initial allowance for any plant or machinery used