CAF-2 · Chapter 6 · Question 13 of 15
Miss Sara's commercial property generated a gross rent of Rs. 1,000,000 for the tax year. She incurred the following actual expenses: Property Tax Rs. 50,000, Insurance Premium Rs. 30,000, Actual Repairs Rs. 100,000, and Legal fees to defend the property's title Rs. 20,000. Calculate her net taxable Income from Property.
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) B) Rs. 700,000
Explanation
Gross Rent = Rs. 1,000,000. Less statutory deductions: Repair allowance (1/5th of 1,000,000 = Rs. 200,000 - actual repair of 100,000 is ignored), Property Tax (Rs. 50,000), Insurance (Rs. 30,000), Legal fees (Rs. 20,000). Total deductions = Rs. 300,000. Net Taxable Income = Rs. 700,000.
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