600 words pls...assignment is attached( taxation law)

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Answered Same DayOct 23, 2021BULAW5916

Answer To: 600 words pls...assignment is attached( taxation law)

Riddhi answered on Oct 25 2021
147 Votes
Issue
The issue here is Mohamad had his own business and was working from home using 15% of his home space as office space and is willing to understand the
nature of expenses allowed to him while working from home in 2017-18.
In the year 2018-19 the entire business of Mohamad was acquired by one of his corporate clients and offered him to work for salary in which he was also offered office space. But Mohamad still preferred to work from home two days a week and he wants to understand the nature and amount of expenses that will be allowed to him which he can claim in deduction for 2018-19.
If Mohamad does not sell the business and sold the business, he wants to understand where he shall be liable to capital gain tax and what portion of property.
Rule
As per the rule TR 93/30 an expense that is incurred in respect of home which is used in producing income and has characteristics of Place of business shall be allowed deduction of expenses such as Rent, Interest, Repairs, Insurance and property taxes. Another condition for allowability of such home expense for business purpose is where a business owner is self employed and has no other designated place of busines except for home. The expenses allowed as deduction under sec 8-1 of ITAA are of two categories; One of the category is expenses relating to use of home that are not directly related to income producing activity such as Rent, mortgage interest, municipal taxes and insurance. Second category is Running expenses of house such as electricity, cleaning, cost of repairs, leasing and...
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