Income from property and Capital gain

[kashif_0014]

salam

i am MOD C student of ICAP

i have 2 queries. first is that if a person is conducting business solely in the sale of paintings and other antique items then the income from sale of such items will be included in income from business or capital gain???

second is that if an individual earns rent which is below Rs. 150,000 (for example Rs. 120,000) in a Tax year and has taxable salary income of Rs 500,000 then what will be the treatment of income from property??
as the person has not satisfied all the conditions in section 15(7) of ITO 2001, rent must be chargeable to tax, but at what rate , since the rate of income from property is 0% for rent below Rs 150,000. does that means that there will be 0% tax on inc from property??

please clarify the situations

thanks

[Abuzar Qazi]

Assalam o Alaikum Dear.....Yes you are right..As in your case not all the three conditions as mentioned in section 15 subsection 7 are met so the subsection 1 of section 15 shall be applicable however the rate of tax shall be Nil(0%)as you said....As far as the classification of head of Income is concerned It should be classified as capital gain because the definition of capital asset clearly mentions it with the statement " Property of any kind whether or not connected with the business"

Hope the answer of your question

[kashif_0014]

in case of my second query, is that possible that inc from property shall not be taxed as separate head of inc rather it is added up with the total income( that is salary in my example) and then tax the inc from property collectively at the rates of salaried person???

[LapTop]

Q-1) Ap painting or antique items sale kar rahy han,, ya to domistic purchase kar rahy hon gay ya import kar rahy hon gay,, dono surton may ye income normal income may shamil nahi ki ja sakti,,,,
agar domistic purchases or imports dono hayn to dono par alahda alahda rate charge karyn gay,,,
han agar aap ye items khud bana rahy han to phir ye aap ki normal income ho gi tab aap normal rate k hisab say tax ada karyn gay,,

Capital gain hamesha sale of capital asset par hota hayy jab k ye inventory hay.

Q-2)
rental income exempt hay agar wo 150000 say kam hay or individual ki koi other income nahi hay.
ap k case may rental income 120000 hay pa other income bhi hay is waja say rental income chargable to tax hay,,,,
par jab aap first schedule may rate check karyn gay to wahan par "Nil" ka word hay,,, is waja say ye income to taxable hay par is ka rate abhi tak "Nil" hi rah gya hay FBR ki laparwahi say,, to aap bayfikar ho kar is income par tax na dayn....

[Abuzar Qazi]

Income from property is taxable as a separate block of income and is therefore not possible to add it with your income from other sources (salary in your case).....Under separate block of income tax is computed separately specific to that income and is then added with to the normal tax liability that accrues in other heads....

Hope the answer of your question