A person purchase property of Rs. 3,000,000. Further he paid
- Stamp duty 10,000
- Capital value tax 5,000
- Withholding tax {236(K)} 3,000
- Development charges 20,000
Are these expenses to be included in the cost of the assets in wealth statement? What will be its impact on expenses?
Solution:
| Assets cost | Rs. 3000,000 |
| Stamp duty | Rs. 10,000 |
| Capital value tax | Rs. 5,000 |
| Development charges | Rs. 20,000 |
| Total value of assets required to furnish in wealth statement | Rs. 3035,000 |
Further the below amount will be expensed out from personal expenses in wealth statement.
| Stamp duty | Rs. 10,000 |
| Capital value tax | Rs. 5,000 |
| Development charges | Rs. 20,000 |
| Total expenses incurred on acquiring asset | Rs. 35,000 |
As far as withholding tax is concerned, WHT under section 236K will be adjustable against the final tax liability of the individual therefore carries no value in computing the cost of asset as well as the value of expenses.
Means if the person tax liability is Rs. 10,000 and WHT under section 236K is Rs. 3,000 then the said person has to pay only Rs. 7,000 tax liability.