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Income From Business Profession

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					Income From Business
    & Profession
          Business
Business is the economic activity of
providing goods & services to
others for a financial return.
Business include :
Trade
Commerce
Manufacture
vocation
Trade :
Buying goods & selling them to make
profit
Commerce:
It includes buying & selling goods as
well as services which are helpful in
trade,transportation,banking,insurance,
etc.
Manufacture:
To work upon something by hand or by
machine in order to turn it into something
different what it was before.
Vocation:
Ability of a person to do some particular
work generally by the application of
manual skill .
           Profession

Any income is earned through purely
intellectual skill or through manual skill
controlled by intellectual is called
profession
   Taxable Business
       Income
During the tax year ,profits of a
business
Income from the hire or lease of
tangible moveable property
Management fee derived by
management company.
Income from business
   exempt from tax
Any institution which is not for purposes
of profit
Agricultural income
Income from export of computer
software & its related services
developed in Pakistan.
     Deductions (u/s 20)
 Revenue Expenses:-
 All revenue expenses essential to get
gross receipts of income but the following
two types of expenses are not allowed.
(a) Personal Expenses
(b) Capital Expenses
.
      Amortization:-
        1/5th of amortization expenses which
    means initial expenses,expenses on
    intangible assets are allowed as a
    deduction in five years under the head
    income from business and profession.
 Rent: -
 Rent of premises where the business is
carried on the allowable deduction under the
head income from business and profession.
  Taxes: -
 All taxes and charges etc except income tax
paid under income tax ordinance 2001 are
allowable deduction under the head income
from business and profession.
   Current Repair: -
 Any amount spent for the current repair of the
assets, which was used for the promotion of
business, is an allowable deduction under the
head income from business and profession.
   Scientific Research: -
 Any amount spent on the scientific research
for the improvement of the business is an
allowable deduction under the head income
business and profession.
 Training of the Employees: -
 Any amount spent for the training of the
employees is also an allowable deduction
under the head income from business and
profession.
 Lease/Rental: -
 Any amount paid to the leasing company for
the purpose of acquiring the machinery and
plant for the purpose of business.
  Bad Debt:-
Amount of bad debts allowed by the
 commissioner of income tax.

				
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