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Income Tax Ordinance, 2001
CHAPTER-IV COMMON RULES PART III ASSETS
From: 2023-07-01 - To: 0000-00-00 76. Cost.- (1) Except as otherwise provided in this Ordinance, this section shall establish the cost of an asset for the purposes of this Ordinance. (2) Subject to sub-section (3), the cost of an asset purchased by a person shall be the sum of the following amounts, namely:- (a) The total consideration given by the person for the asset, including the fair market value of any consideration in kind determined at the time the asset is acquired; (b) any incidental expenditure incurred by the person in acquiring and disposing of the asset; and (c) any expenditure incurred by the person to alter or improve the asset, but shall not include any expenditure under clauses (b) and (c) that has been fully allowed as a deduction under this Ordinance. (3) The cost of an asset treated as acquired under sub-section (6) of section 75 shall be the fair market value of the asset determined at the date it is applied to business use. (4) The cost of an asset produced or constructed by a person shall be the total costs incurred by the person in producing or constructing the asset plus any expenditure referred to 1[in] clauses (b) and (c) of sub-section (2) incurred by the person. (5) Where an asset has been acquired by a person with a loan denominated in a foreign currency and, before full and final repayment of the loan, there is an increase or decrease in the liability of the person under the loan as expressed in Rupees, the amount by which the liability is increased or reduced shall be added to or deducted from the cost of the asset, as the case may be 2[:] 3[Explanation.-Difference, if any, on account of foreign currency fluctuation, shall be taken into account in the year of occurrence for the purposes of depreciation.] (6) In determining whether the liability of a person has increased or decreased for the purposes of sub-section (5), account shall be taken of the person’s position under any hedging agreement relating to the loan. (7) Where a part of an asset is disposed of by a person, the cost of the asset shall be apportioned between the part of the asset retained and the part disposed of in accordance with their respective fair market…
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