02-07-2011, 06:49 PM
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by LapTop</i>
<br />155. Income from property. â (1) Every prescribed person making a payment in full or part (including a payment by way of advance) to any person on account of rent of immovable property (including rent of furniture and fixtures, and amounts for services relating to such property) shall deduct tax from the gross amount of rent paid at the rate specified in Division V of Part III of the First Schedule.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Dear Laptop,
The material, which you have copied from the ordinance, does not indicate the proper reply of the poster, since poster asked regarding treatment of "rent receipt for more than a year".
The statement (i.e. including a payment by way of advance) written in section 155, does not mean what you perceived, rather it means; if rent is received in advance for a particular tax year, then tax will have to be withheld in advance for that particular tax year.
Let me further clarify; where there is no specification regarding an issue in ITO, then such issues are always settled in favor of Tax Payer rather than tax payee, so the most favorable treatment is better known to the poster which he must have ascertained from my earlier reply.
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Sayub</i>
<br />As per ITO, 2001 Rent is taxable on receipt basis, therefore Rent "Received in Advance" shall be taxable in the year of receipt however in the subsequent years there will be No "Receipt" therefore no tax.
As far as reference is concerned refer Sections 15 and 16 of ITO, 2001.
Hope this answered your query.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Dear Sayub,
Glad to see a new member, having some insight knowledge to strengthen the forum and help the viewers at large.
However, in this particular case, i would be anxious to know your views as to where there is written that "Rent is taxable on receipt basis"?
Furthermore, section 15, interalia, in its sub section 1, specifically states that rent will be chargeable when the same has been received or receivable.
The emphasis is on the word "receivable" for your reference.
Here section 15(1) is being quoted verbatim "The rent received or receivable by a person for a tax year, other than rent exempt from tax under this Ordinance, shall be chargeable to tax in that year under the head - Income from Property".
Unquoted
On the basis of aforesaid section; tax will have to be paid(if applicable) on the basis of fair market rent, whether the same has physically been received or not. Similarly, where tax has been received in a tax year with regard to subsequent tax year(s), then income will be shown in either year, based on tax payer's discretion, and this is irrespective of whether tax has been withheld by the payer or not.
Let me know, should you need further clarifications.
Best Regards,
Faisal.
<br />155. Income from property. â (1) Every prescribed person making a payment in full or part (including a payment by way of advance) to any person on account of rent of immovable property (including rent of furniture and fixtures, and amounts for services relating to such property) shall deduct tax from the gross amount of rent paid at the rate specified in Division V of Part III of the First Schedule.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Dear Laptop,
The material, which you have copied from the ordinance, does not indicate the proper reply of the poster, since poster asked regarding treatment of "rent receipt for more than a year".
The statement (i.e. including a payment by way of advance) written in section 155, does not mean what you perceived, rather it means; if rent is received in advance for a particular tax year, then tax will have to be withheld in advance for that particular tax year.
Let me further clarify; where there is no specification regarding an issue in ITO, then such issues are always settled in favor of Tax Payer rather than tax payee, so the most favorable treatment is better known to the poster which he must have ascertained from my earlier reply.
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Sayub</i>
<br />As per ITO, 2001 Rent is taxable on receipt basis, therefore Rent "Received in Advance" shall be taxable in the year of receipt however in the subsequent years there will be No "Receipt" therefore no tax.
As far as reference is concerned refer Sections 15 and 16 of ITO, 2001.
Hope this answered your query.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Dear Sayub,
Glad to see a new member, having some insight knowledge to strengthen the forum and help the viewers at large.
However, in this particular case, i would be anxious to know your views as to where there is written that "Rent is taxable on receipt basis"?
Furthermore, section 15, interalia, in its sub section 1, specifically states that rent will be chargeable when the same has been received or receivable.
The emphasis is on the word "receivable" for your reference.
Here section 15(1) is being quoted verbatim "The rent received or receivable by a person for a tax year, other than rent exempt from tax under this Ordinance, shall be chargeable to tax in that year under the head - Income from Property".
Unquoted
On the basis of aforesaid section; tax will have to be paid(if applicable) on the basis of fair market rent, whether the same has physically been received or not. Similarly, where tax has been received in a tax year with regard to subsequent tax year(s), then income will be shown in either year, based on tax payer's discretion, and this is irrespective of whether tax has been withheld by the payer or not.
Let me know, should you need further clarifications.
Best Regards,
Faisal.