1. Mr. Muhammad Younus Ghazi
PAKISTAN TAX BAR ASSOCIATION Presentation on Income from Property and Deductions at PTBA Summer Camp-2009 by
Mr. Muhammad Younus Ghazi
B.Com (Hons); M. Com; FCA
Chartered Accountant
Multan

2. Income from property and deductions
Basis of charge (sec. 15)
Necessary condition
Land or building (Sec. 15(2))
Person should be owner of the property
Where letting out is subservient and incidental to the business
Self occupied houses where rent is also receivable by the owner (Sec. 15(5))

3. Income from property and deductions
Fair market rent – determination of (Sec. 15(4))
Treatment of non adjustable amounts
(Sec. 16(1) to 16(3))
Non adjustable advance rent or pugree or security
If tenant vacates the premises before the expiry of ten years (Sec. 16(2))
Where on vacancy before 10 years, non adjustable sum is received from a new tenant (Sec. 16(3))

4. Income from property and deductions
Exemptions in respect of certain properties
Any income of a trust or a welfare institution or a non profit organization
(Cl. (58), Part 1,2nd Sch.)
Exemption in respect of income from property held under trust etc, for religious and charitable purposes (Cl. (59), Part 1,2nd Sch.)
Deduction at source in respect of certain properties (Sec. 155)
Permissible deductions (Sec. 17)

5. Income from property and deductions
Liability in case of co-owners (Sec. 66)
Definite and ascertainable shares
(Sec. 66)

6. Law Involved Sections 15,16,17,66,67,101(9), 155 involved.
1st Schedule – Rate of Tax
2nd Schedule Part I clauses 58 and 59 - Exemptions

7. Basis of charge Normal income after allowing admissible deduction
Uptil (Y.T. 2006)
Separate Block of income 5% of Gross
amount of Rent (Full and Final Discharge)
From (Tax Year 2007 on wards)
Section 17 Deleted as Taxation was on Gross
Rental Income,
Progressive Rate of Tax in Final Discharge
From (Tax Year 2009)
Notional concept of ALV (Annual letting value)
Uptil ( )
Actual Concept (Received or Receivable)
From (T.Y onwards

8. Rent Received on Reward by Owner of Land and Building
Consideration for use or Occupation or Right
to use or occupy
Includes forfeited deposit for sale of Land or building

9. Fair Market Value It is a Deeming provision.
It applies when rent received is less than fair market
value (FMV) Section 15(4)
This provision will not apply where FMV is
included in Salary Income Section 15(5)

10. Income from property and Its Computation