Tax Book 2023

Common Rules Chapter- 16

Section Rule

Topic covered

Section

Topic covered

(For CAF- 6 & ICMAP

Students)

66 Liability in case of co-owners 72 Cessation of source of income

67

13 &

231 Apportionment of deductions^73

Rules to prevent double derivation &

double taxation

68 Fair market value 74 Tax year

69 Receipt of income

70 Recouped expenditure MCQ’s with solutions

71 Currency conversion

CA Mod C past papers theoretical

questions

(For CAF- 6 AND ICMAP Students)

1. Liability in case of co-owners [Section 66]

(a) In case of co-ownership in property and the share of each co-owner is determinable then share

received by each co-owner from property shall be included in his total income but this

principle will not apply to business income.

(b) If the share of co-owners is not defined even then the income shall be taxed on share of

each co-owner in the capital invested in the property.

(c) Signing amount from the tenant is taxable under the head "income from property". Signing

means the amount paid by the tenant to the owner to enter in the tenancy agreement which is

neither refundable nor it can be termed as deposit.

Example Mr. A and Mr. B are co-owners of a property. Their share in the property is equal. They

received net income from property of Rs. 400,000. Calculate the tax liability of both co-owners.

Solution:

Mr. A Mr. B

Income from property: Rs. Rs.

Share of Mr. A (400,000 x 50%) 200,000

Share of Mr. B (400,000 x 50%) 200,000

200,000 200,000

Computation of Tax liability:

Tax payable by Mr. A and Mr. B:

Tax on Rs. 200 ,000 nil nil

Example:

Mr. A and Mr. B are co-owners of a property. There share in the property is 60% and 40%

respectively. They received gross income from property of Rs. 300,000. Calculate the tax liability of

both co-owners.

16 Common rules

Chapter