Treatment Of Provident Funds

Thursday, December 12, 2013

5) Treatment Of Provident Funds

 There are three types of provident Funds 
i)Government Provident Fund;
ii)Recognized Provident Fund, and
iii)Unrecognised Provident Fund.
         
       Employee contribution in respect of the said three funds will be included in the total income.Interest on P.F. will not be included in respect of Govt.Provident Fund and Unrecognised Provident Fund and will be included in respect of Recognised Provident Fund.

1)Local Compensatory allowance is exempted upto 10% of salary or 2,400 whichever is lower and the rest is taxable;
2)Arrears of pay received are taxable in the year of receipt;Dearness Allow and Special Dearness Allowance is totally exempted;
3)Bonus & Commission etc. are taxable;
4)Indexed pay is taxable.

b)Income From Property

       In computing the Income from property.the following allowance and deduction shall be allowed;.

a)In respect of repairs,an allowance equal to one fifth of the income;
b)Vacancy allowance for the period the property remained vacant;
c)Unrealised rent;
d)Taxes of Government and local bodies;
e)Fire Insurance Premim;
f)Interest on borrowed capital ;
g)Collection charges upto 6% of the actual rent;
 
   AMOUNT received in the trom of DEPOSIT, 10% of such deposit will be added towards the property income,
 
  Income from newly constructed house is exempt upto 5 years if the rental value is upto Rs. 18,000 (in case of Islamabad upto Rs. 24,000).If the income exceeds Rs. 18,000 (Rs.24,000 in case of Islamabad) the exemption is restricted to Rs. 9,000.

1 comment

  1. LAW OF INCOME TAX
    EXCLUSIVE RESEARCH ARTICLES ON IMPORTANT ISSUES RELATING TO INCOME TAX LAW IN WORLD
    is good articles ,, >> for more insurance information visit please moriwah.blogspot.com

    ReplyDelete

 

LAW OF INCOME TAX

Tracker

Web Analytics