Income From Property

Question 1

Income from property (S.15) (SS.2)

Answer 1

2- Rent means:
- any amount received or receivable by the owner of land or a building as consideration for the use or occupation of, the land or building , and
- any forfeited deposit paid under a contract for the sale of land or a building

Question 2

Non-adjustable amounts received in relation to buildings (S.16) (SS.1)

Answer 2

1- Where the owner of a building receives from a tenant an amount which is not adjustable against the rent , it shall be chargeable under the head “Income from Property” in the tax year in which it was received and the following 9 tax years in equal proportion.

Question 3

Non-adjustable amounts received in relation to buildings (S.16) (SS.2)

Answer 3

2- Where an amount which is not adjustable against the rent is refunded by the owner to the tenant on termination of the tenancy before the expiry of 10 years , no portion of the amount shall be allocated to the tax year in which it is refunded or to any subsequent tax year.

Question 4

Non-adjustable amounts received in relation to buildings (S.16) (SS.3)

Answer 4

3- Where the owner has refunded non-adjustable amount to the tenant , on termination of tenancy , and the owner lets out the building to succeeding tenant than new advance less such portion of the earlier amount that was charged to tax , shall be chargeable under the head “Income from Property” in the tax year in which it was received and the following 9 tax years in equal proportion.

Question 5

Income of joint owner (S.66) (SS 1,2)

Answer 5

1- Where any property is owned by two or more persons and their respective shares are definite and ascertainable:
a- the persons shall not be assessed as an AoP in respect of the property; and
b- The share of each person in the income from the property for a tax year shall be taxable in their own hands respectively and not as AoP.

2- This section shall not apply in computing income chargeable under the head “Income from Business”.

Question 6

Deduction allowed under the head income from property (S.15)

Answer 6

a- repair allowance
b- insurance premium (related to building)
c- local rate , tax , charge or cess paid on property (excluding income tax)
d- ground rent paid or payable
e- interest paid
f- share in rent and share towards appreciation in the value of property
g- property is mortgaged
h- rent collection charges
i- legal charges
J- bad debt