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GROUP MEMBERS

ZARA HAFEEZ

SAQIB SIRAJ

AHMED MUNEEB

WALEED SETHI

JAHANZAIB

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ASSETS ANDDEPRECIATION

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ASSETS

Black Law Dictionary :

“Property of all kinds, real and personal, tangible and

intangible, including, inter alia,for certain purpose, patents andcauses of action which belong to

any person including acorporation and the estate of

decedent. The entire property of

a person that is applicable or

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INCOME TAX ORDINANCE 2001

Capital assets

Depreciation assets

Eligible depreciable asset

ntangible

Pre!co""ence"ente#pendit$re

Stock!in!trade

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CAPITAL ASSETS

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DEPRECIABLE ASSETS

• Any tangible "o%eable  ori""o%able property havingnormal useful life more than one year

and is being used by the owner forhis business purpose is a depreciableasset.

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ELIGIBLE DEPRECIATIONASSET 

• It means a depreciable asset otherthan the following assets:

&ny road transport %e'icle $nless t'e

%e'icle is plying (or 'ire)

&ny ($rnit$re or *ttings

&ny plant or "ac'inery t'at 'as been$sed pre%io$sly in Pakistan

&ny asset w'ose total cost 'asalready been allowed as ded$ction in

t'e ta# year in w'ic' it is ac+$ired

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INTANGIBLE •

Intangible means assets or expenditure offollowing types if it provides an advantageof benet for a period of more than oneyear:

Patentsn%ention

s

Design or

"odel

Secret(or"$la

orprocess

Copyrig't

,rade"ark 

Scienti*cor tec'nicalknowledge

Co"p$terso(tware

Motionpict$re *l"

E#port+$otas

-ranc'ise Licensee

ntellect$alproperty

Ot'er likeproperty or

rig't

Contract$alrig'ts

&ny ot'ere#pendit$r

e.bene*ted

"ore t'an/ year)

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PRE-COMMENCEMENTEXPENDITURE

• Its not an asset its an expense.

• It provides benet more than one year.

• It is treated as “ de(erred re%en$ee#pendit$re0  and it is also termed as 1*ctitio$s assets0)

• Under income tax ordinance, !!", it means anyexpenditure incurred before the commencementof such business the income of which ischargeable to tax. It includes:

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ncorpora

tione#penses

Cost o(

(easibilityst$dies

Cost o(constr$ct

ion o(prototypes

Cost o(trial

prod$ctionacti%ities

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STOCK-IN-TRADE

•   #toc$%in%trade means anythingproduced, manufactured, purchased or otherwiseac&uired for manufacture, sale or exchange .

• It also includes any material or supplies that areto be consumed in the production or manufacturingprocess.

• 'owever, stoc$s and shares do not form part of the“stoc$%in%trade(. It means that shares will never betreated as stoc$%in%trade even if these are held forbusiness and sale purpose.

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ACQUISITION OF AN ASSET 

•   A person shall be treatedas having ac&uired an asset at anyof the following times:

2'en 'e

begins toown anasset)

2'en 'e isgranted

any rig'tto own an

asset)

2'en apersonal

asset isapplied (orb$siness

$se)

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DISPOSAL OF AN ASSET 

• It means to pass over an asset tosome other person.

• It denotes the change of

ownership of an asset.

Under Income )ax *rdinance, !!" adisposal may ta$e place when anasset is:

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SoldE#c'anged

,rans(erredDistrib$ted

Cancelled

Redee"ed

Relin+$is'ed

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DestroyedLost

E#pired

S$rrendered,rans"itted by s$ccession or $nder awilln case o( b$siness assets. applied to

personal $sen case o( a b$siness asset. discarded or

ceased to be $sed in b$siness)

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ANYQUESTION

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THANK YOU