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Tuesday, 12 March 2013

Define the following terms in the income tax ordinance Depreciable Asset, Firm, Intangible, Non profit organization






DEPRECIABLE ASSET :-
Income tax ordinance has defined this in these words “ Depreciable asset implies any tangible moveable and immoveable property owned by a person :

1.    Who has a normal life more than one year.
2.    It is likely to lose value as a result of normal wear and tear.
3.    Property is used wholly or partly by the person in driving income from business chargeable to tax.



FIRM :-
Under income tax ordinance the firm has been defined in the following way. “Firm means the relation between persons who have agreed to share the profits of a business. The business may be carried by all or any one of them.



INTANGIBLE :-
According to income tax law ordinance intangible means ;
·    Any patent
·    Invention
·    Copyright
·    Design
·    Model
·    Contractual rights
·    Secret formula of process
·    Any other business expenditure which provides benefits for more than one year.

Note : Depreciable asset and UN-improved land is not included in it.



NON PROFIT ORGANIZATION :-
According to income tax law non profit organization means any person other than individual which is :
·    Established for religious, educational, charitable, welfare or development purposes.
·    Established for the promotion of an amateur sport.
·    It should be registered as non profit organization.
·    Commissioner income tax has declared it for the specific period.
·    It assets can not be used for private persons benefit.

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