Tuesday, 12 March 2013

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

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.

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.

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.

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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