INCOME FROM PROPERTY: ILLUSTRATION 8

The following information relates to the income of Mr. Khalid in respect of the year ended 30th June 2012:
Commission

Income of non-professional writers

Property income (Let out to oil company)

Donation to recognized educational institution

4.20,000

Zakat deducted Required. Calculate tax payable of Mr. Khalid.

Solution

Mr. Khalid

Tax Year: 2012 Tax Year Ended: 30th June 2012

Personal Status: Individual (Salaried Person)) Residential Status: Resident

Computation of Tax Payable

Income from Salary (Section 12)

Salary

Income from Property (Section 15) Property income

4,70,000

(Separate block of income)

4,20,000
Income from Other Sources (Section 39) Income of non-professional writer

10,000

Total income

4,80,000 3,000

4.77,000

Less Zakat deducted

Taxable income

Computation of Tax

Tax on income other than property

Income tax on Rs 4,77,000 @ 3.5% As per rule of marginal relief
Tax on Rs 4,50,000 @ 2.5%

Tax on exceeding amount

5,400

16.650

Rs. 27,000@20% (Rs 4,77,000-4,50,000)

Whichever is less

16,650

Add Tax on income from property

12,500

Tax on Rs. 4,00,000 Tax on Rs. 20,000 @ 7.5%

Gross Tax

Amount Entitled to Average Relief

Donation to recognized

educational institution Rs. 25,000 Average Relief=

Gross Tax

Taxable Income

Amount Entitled to Average Relief

Note:

There are separate rates of taxation for income from Dfa Ho property. From tax year 2011 onwards income from property and tax

thereon shall be considered for the purpose of average relief