In the Name of Allah, the Most Beneficent, the Most Merciful

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Corporate Taxation
By

Dr. Qaiser Rafique Yasser

Assistant Professor (Business Administration)

Drqaiser.rafique@preston.com.pk

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 Income from Property
Under section 15 of the Income tax Ordinance, 2001,
“Property” means land or building.
• Rent (received or receivable)
• Tenant or Lessee
• Landlord or Lessor

• Fair Market Value (FMV) vs Actually Rent Value

• Un-adjustable advance (1/10)
• Rent Collection Charges (6% or actually which one is
lower)
• Repair and maintenance expenditure (1/5)
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 Property Tax Rates
• Annual Rental Income upto 2 Lac is exempt from tax

• Annual Rent 2-6 Lac = 5% of the gross amount

• Annual Rent 6-10 Lac = Rs 20,000 plus 10% of the gross amount

• Annual Rent 10-20 Lac = Rs 60,000 plus 15% of the gross amount

• Annual Rent above 20 Lac = Rs 210,000 plus 20% of the gross

amount

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 Calculate the Property Tax

• Actual Rent of the Year Rs. 300,000

• Market Value of Monthly Rent Rs. 25,000
• Rent Arrears Received Rs. 12,000
• Un-adjustable advance Rs. 100,000
• Lawyer’s fee for drafting rent deed Rs. 8,000
• Rent Collection Charges Rs. 31,500
• Repair and Maintenance expenditure Rs. 89,000
• Insurance Premium of the Property Rs. 20,000
• Zakat Paid Rs. 5,500

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 Calculate the Property Tax

• Actual Rent of the Year Rs. 350,000

• Market Value of Monthly Rent Rs. 35,000
• Rent Arrears Received Rs. 20,000
• Rent Collection Exp. not claimed (22 months) Rs. 10,000
• Un-adjustable advance Rs. 150,000
• Token Money Rs. 200,000
• Lawyer’s fee for drafting rent deed Rs. 10,000
• Rent Collection Charges Rs. 35,100
• Repair and Maintenance expenditure Rs. 27,000
• Insurance Premium of the Property Rs. 10,800
• Property Tax paid Rs. 1,555
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Calculate the Property Income for Tax Purpose

• Actual Rent of the Year Rs. 380,000

• Market Value of Monthly Rent Rs. 35,000
• Un-adjustable advance Rs. 90,000
• Token Money Rs. 300,000
• Lawyer’s fee for drafting rent deed Rs. 15,000
• Building white washed Rs. 13,000
• Expenses incurred by watchman to collect rent Rs. 8,000
• Repair and Maintenance expenditure Rs. 70,000
• Insurance Premium paid by landlord Rs. 13,500

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Calculate the Rent Income for Tax Calculation:

• Actual Rent of the Year Rs. 440,000

• Market Value of Monthly Rent Rs. 40,000
• Un-adjustable advance Rs. 150,000
• Vacancy allowance Rs. 30,000
• Lawyer’s fee for drafting rent deed Rs. 15,000
• Building white washed Rs. 13,000
• Collection Charges Rs. 18,000
• Repair and Maintenance expenditure Rs. 82,000
• Ground Rent Rs. 22,000
• Insurance Premium of the property Rs. 10,500
• Last year Insurance paid by Tenant Rs. 9,850

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 Calculate the Property Tax – (2)

• Actual Rent of the Year 480,000

• Market Value of Annual Rent 600,000
• Un-adjustable advance during the year 100,000
• Vacancy allowance 60,000
• Collection charges 40,000
• Insurance premium of the property 20,000
• Repair and maintenance expenditures 50,000
• Lawyer’s fees for drafting the rend deed 5,000
• Ground Rent paid by landlord 25,000
Tenant contracted with landlord for the purchase of building and paid Rs.
30,000 as token money and before the date of maturity, tenant breached the
contract. According to the agreement, tenant will pay property tax on
behalf of owner which is Rs. 10,000.

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 THANK YOU
and God Bless You

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