CAF-2 · Chapter 6 · Question 8 of 15
Mr. Dawood incurred Rs. 180,000 as actual repair and maintenance expenses on his rented property during the year. The gross rent chargeable to tax for the property is Rs. 2,000,000. What amount of repair allowance will he be allowed to deduct while computing his taxable income?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) C) Rs. 400,000
Explanation
For individuals and AOPs, the law allows a flat statutory repair allowance equal to 1/5th (20%) of the gross rent chargeable to tax, irrespective of the actual expenses. Therefore, 1/5th of Rs. 2,000,000 = Rs. 400,000 is allowed.
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