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Expenses paid against immovable property - K. K. ADVISORS

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.

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.

 

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