SMEDA Business Guide Series

Procedure for Income Tax

(For a Company)
PP&S/1(Reg-5)/R-2/September 20th, 2003

Prepared By: Policy Planning & Strategy Small and Medium Enterprise Development Authority Government of Pakistan
www.smeda.org.pk
HEAD OFFICE Waheed Trade Complex, 1st Floor , 36-Commercial Zone, Phase III, Sector XX, Khayaban-e-Iqbal, DHA Lahore Tel: (042) 111-111-456, Fax: (042) 5896619, 5899756

Helpdesk@smeda.org.pk
REGIONAL OFFICE PUNJAB Waheed Trade Complex, 1st Floor, 36-Commercial Zone, Phase III, Sector XX, Khayaban-e-Iqbal, DHA Lahore. Tel: (042) 111-111-456 Fax: (042) 5896619, 5899756 helpdesk@smeda.org.pk REGIONAL OFFICE SINDH 5TH Floor, Bahria Complex II, M.T. Khan Road, Karachi. Tel: (021) 111-111-456 Fax: (021) 5610572 helpdesk-khi@smeda.org.pk REGIONAL OFFICE NWFP Ground Floor State Life Building The Mall, Peshawar. Tel: (091) 9213046-47 Fax: (091) 286908 Helpdesk-pew@smeda.org.pk REGIONAL OFFICE BALOCHISTAN Bungalow No. 15-A Chaman Housing Scheme Airport Road, Quetta. Tel: (081) 831623, 831702 Fax: (081) 831922 helpdesk-qta@smeda.org.pk

TABLE OF CONTENTS
1. 2. 3. 4. 5. Introduction of SMEDA Role of Policy Planning and Strategy Group Flow Chart National Tax Number Maintenance of Book Accounts 03 03 04 05 05 07 09 09 15 16 16-23

6. Penalties 7. Preparation of Accounts 8. 9. Computation of Income Tax Filing of Annual Income Tax Return

10. Assessment 11. Annexures

INTRODUCTION OF SMEDA
The Small and Medium Enterprise Development Authority (SMEDA) was established in 1998, with the objective to provide fresh impetus to the economy through the launch of an aggressive SME development strategy. SMEDA initially focused on nine priority sectors with the intention of developing sector strategies and proposing regulatory reforms to stimulate growth on the sole criterion of SME presence. In depth research was conducted and comprehensive plans were formulated after identification of impediments and retardants. These strategies as proposed by SMEDA comprehensively covered all important areas of business operation such as regulatory environment, finance, marketing, technology and human resource development. Resultantly, SMEDA successfully formulated strategies for sectors, including fruits and vegetables, marble and granite, gems and jewellery, marine fisheries, leather and footwear, textiles, surgical instruments, transport and dairy. The task of SME development at a broader scale still required more coverage and enhanced reach in terms of SMEDAs areas of operation. Therefore, after successfully qualifying in the first phase of sector development SMEDA reorganised its operations in January 2001. Currently, SMEDA along with the sectoral focus offers a range of services to the SMEs including over the counter support systems, exclusive business development facilities, training and development for SMEs and information dissemination through wide range of publications. SMEDAs activities can now be classified into following three broad areas: 1. Creating a Conducive Environment; includes collaboration with policy makers to devise facilitating mechanisms for SMEs by removing regulatory impediments across numerous policy areas 2. Cluster/Sector Development; comprises formulation and implementation of projects for SME clusters/sectors in collaboration with industry/trade associations and chambers 3. Enhancing Access to Business Development Services (BDS); take into account development and provision of services to meet the business management, strategic and operational requirements of SMEs The aforementioned reorganisation of SMEDA is driven by enhanced interaction with the stakeholders and suggests that SMEDAs is a true learning organization and always ready to take lead in the SME development arena.

Role of Policy Planning and Strategy Department

Policy planning and Strategy (PP&S) department of Smeda is the hub of policy and regulatory research that feeds national, provincial and local government institutions, SME associations, industrial clusters and individual entrepreneurs with an ultimate objective of creating a conducive business environment. It has a mandate to identify and where suitable initiate strategic projects. Library and Information resource center of SMEDA is an integral part of PP&S while development of Regulatory Procedures is a part of an overall information dissemination function of the department.

FLOW CHART1

Registration of a company with Income Tax Application for NTN Complete IT-A One attested NIC copy of all partners/direct ors Incorporation certificate Memorandum/ Articles of Association.

File of application on IT-A for a company with concerned NTN Cell Books Record Maintenance of books of accounts for a financial/income year

Calculation of income/profit from accounts for a financial year, audited by a Chartered Accountant Firm Calculation of total taxable income ` Tax deductions Calculation of tax at applicable slab rate Deduction of advance taxes Total tax payable with return (Total income deductions) * slab rate advance taxes = final tax payable.

Computation of income tax

Profit and Loss account Balance Sheet Fixed assets and depreciation schedule

Filing of Income Tax return along with audited accounts

Assessment by Tax department

Form of income tax returns for companies 4 Tax payment Challans IT 31 (A,B,C,D)

NATIONAL TAX NUMBER (NTN)

Every company is assigned a national tax number (NTN). The reason for having a NTN is that a company cannot file its returns if it does not have the NTN, and for those companies which do not have NTN must file an application for it. The application form can be obtained from nearest NTN Centers (located at Income Tax Building, Shahrahe-Kamal Attaturk, Karachi; Income Tax House, Nabha Road, Lahore; OR CDA Block -II , Old CBR Building, Melody,G-6 ,Islamabad) or downloadable from CBR website www.cbr.gov.pk. The documentation required for companies is as follows. Photo copies of NICs of all the partners or directors. Incorporation or the registration certificate. Application for NTN by individual partners or directors in case they do not have NTN.

Class-1 gazetted officer or an officer of the state owned bank should attest all documents.

MAINTAINANCE OF BOOK OF ACCOUNTS

It is mandatory for a company to maintain books of accounts and accounting records. For this purpose, the company according to Income Tax Rules 2003 must maintain the following accounting records. Cash memo or invoice It is acknowledgement of sale or transaction, required to be issued for each transaction of sale and carbon or duplicate copy should be retained to support the tax return by law. The memo should be serially numbered containing date, name or business name, national tax number, sales tax registration number, quantity and value of goods sold or services rendered. Daily record of receipts, sales, payment, purchases and expenses This record should be maintained in a systematic manner and no specific format prescribed for it but this would help the company to prepare final income statement.

Vouchers of purchases and expenses These vouchers must be retained to support the return and include Original cash memos, invoices and receipts of purchases and expenses. Salary register, copies of NIC of employees, attendance record and acknowledgement of salary paid to employees

Cash book and/or Bank Book or Daily Business Record The daily transactions of receipts, sales, payments, purchases and expenses be recorded in cash book or a bank book in a systematic manner which would help to prepare final income statement and balance sheet.

Records of utility bills Records to be Maintained for Income from Other Sources The taxpayers deriving income from other sources are required to maintain following records. Company deriving income from property Tenancy agreement, if executed; Tenancy termination agreement, if executed Receipt for amount of rent received Evidence of deductions claimed in respect of premium paid to insure the building, local rate, tax, charge or cess, ground rent, profit/interest or share in rent on money borrowed, expenditure on collecting the rent, legal services and unpaid rent

Company deriving income from capital gains Evidence of cost of acquiring the capital asset Evidence of deduction for any other costs claimed Evidence in respect of consideration received on disposal of the capital asset. Income from Dividends Dividend warrants. Income from Royalty Royalty agreement. Income from Profit on Debt Evidence and detail of profit yielding debt Evidence of profit on debt and tax deducted thereon, like certificate in the prescribed form or bank account statement Evidence of Zakat deducted, if any

The preparation and maintenance of these accounts is important for a company to calculate its annual profit/income. The tax authorities assess a company on the basis of particulars mentioned in the tax return. These particulars are taken from audited accounts. All accounts and documents to be maintained under Section 174 of Income Tax Ordinance 2001 and Income Tax Rules 2002 shall be kept/maintained for five years after the end of tax year to which they relate.

PENALTIES
There are certain kinds of penalties that can be imposed on the taxpayer upon noncompliance of the income tax regulations, which are defined in the following section Section 182(S182) If a taxpayer fails to produce income return under the Ordinance or an income statement under Section 115 (4), a penalty equal to one-tenth of one percent of tax payable for each default day subject to a minimum penalty of Rs. 500 and maximum of Rs. 25, 000 is imposed. A person failing to provide any statements as required under Section 165 of this Ordinance is required to pay a penalty of Rs.2, 000. Also if a person continues to fail to furnish the statement, an additional penalty of Rs.200 for each day of default will be imposed. Section 183(S183) According to this section taxpayer who fails to pay any tax by due date shall be subjected to 1. Penalty of 5% of the amount of tax in case of first default, 2. Additional 20% penalty of amount for second default, 3. 25% in case of third default and 4. Upto 50% for fourth and subsequent default but the total penalty would not exceed above 100%. If the amount of tax in respect of any penalty imposed under sub-section (1) decreases, the amount of penalty would also reduce accordingly. Section 184(S184) A person furnishing inaccurate particulars in returns will have to pay a penalty equal to the amount of tax that he tries to evade by doing so. Section 185(S185) If a person fails to maintain records as required by the tax law, 1. A penalty of Rs.2, 000 shall be imposed in case of first failure, 2. Rs.5, 000 for second failure and 3. Rs.10, 000 for third and subsequent failure. Section 187(S187) A person submitting false particulars in statement of various advance taxes paid under Section 147 shall have to pay a penalty equal to 200% of the tax shortfall and 25% of shortfall in cases other than Section 147. PENALTIES There are certain kinds of penalties that can be imposed on the taxpayer upon noncompliance of the income tax regulations, which are defined in the following section

 Section 182(S182) If a taxpayer fails to produce income return under the Ordinance or an income statement under Section 115 (4), a penalty equal to one-tenth of one percent of tax payable for each default day subject to a minimum penalty of Rs. 500 and maximum of Rs. 25, 000 is imposed. A person failing to provide any statements as required under Section 165 of this Ordinance is required to pay a penalty of Rs.2, 000. Also if a person continues to fail to furnish the statement, an additional penalty of Rs.200 for each day of default will be imposed. Section 183(S183) According to this section taxpayer who fails to pay any tax by due date shall be subjected to 5. Penalty of 5% of the amount of tax in case of first default, 6. Additional 20% penalty of amount for second default, 7. 25% in case of third default and 8. Upto 50% for fourth and subsequent default but the total penalty would not exceed above 100%. If the amount of tax in respect of any penalty imposed under sub-section (1) decreases, the amount of penalty would also reduce accordingly. Section 184(S184) A person furnishing inaccurate particulars in returns will have to pay a penalty equal to the amount of tax that he tries to evade by doing so. Section 185(S185) If a person fails to maintain records as required by the tax law, 4. A penalty of Rs.2, 000 shall be imposed in case of first failure, 5. Rs.5, 000 for second failure and 6. Rs.10, 000 for third and subsequent failure. Section 187(S187) A person submitting false particulars in statement of various advance taxes paid under Section 147 shall have to pay a penalty equal to 200% of the tax shortfall and 25% of shortfall in cases other than Section 147.

PREPARATION OF ACCOUNTS
Every company has to prepare its accounts and get them audited by a certified Chartered Accountant firm. These accounts are required by the company as well as the income tax authorities to calculate the income of the company and its tax liability/ refund. Following is a set of accounts, which are required with tax returns: Profit And Loss Account Balance Sheet Notes To The Accounts Details Of Fixed Assets And Depreciation Schedule

There may be difference between the tax calculated by a company and the tax calculated by the tax department. This difference is due to change in depreciation2 rates, lease rentals and other differences as stated in the Income Tax Ordinance 2001, 3rd Schedule.

COMPUTATION OF INCOME TAX

Under Section 114 of the Income Tax Ordinance 2001, every company whose income is assessable for any income year, will furnish a return of its total income. The income tax returns will be furnished either by registered post or by hand to the Income Tax authorities. The acknowledgement receipt must be taken from the Income Tax authorities, at the time of filing of Income Tax returns.

Computation of Total Taxable Income:

In order to compute the income of a company for the year in which it is assessable, following steps will be taken under the following sections of the Income Tax Ordinance 1979: 1. Section 18 (S18): This includes income from business such as a) Profits and gains of any business, b) Any income derived by any trade, professional or similar relation with the sale or provision of services to its member c) From the hire or lease of tangible movable property or d) Any obtained profit on debt The deductions are allowed under section -20. Section 39 (S39) This section refers to income earned from any other sources such as, dividend, royalty, profit on debt, ground rent, rent from the sub-lease of land or a building, income from the lease of any building together with plant or machinery, any annuity

Depreciation: It is a measure of the wearing out, consumption or other losses in the value of the Fixed Asset arising from usage, passage of the time or obsolescence.
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or pension, rent received or receivables for providing facilities or any other services related to the renting of building etc. Deductions are allowed according to section 40. Section 15 (S15) (If applicable) This pertains to income earned by a business concern in the form of rent received from house property subject to deductions allowed under section 17. Section 37 (S37) Capital Gains (If applicable) This section relates to gain arising on discarding or transferring of a capital asset by a person in a tax year. The deductions allowed are mentioned under section 38. The total taxable income can be calculated by summing up the above mentioned sections. S18 + S39 + (S15 + S37) If Applicable = Total Taxable Income. It is mandatory for a company to show all incomes mentioned above in its annual income tax returns.

The bonus shares issued by the companies on or after July 1, 2001 will not be treated as its income. Thus, the companies will not have to pay taxes at the time of issuance of bonus shares. But the companies will collect tax @10% from the shareholders other than the companies. The companies' income from TFCs is still taxable but the income generated from TFCs is not taxable.

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TAXES ON EXPORTERS
The tax on exporters is levied according to First Schedule Part III Division IV under section 154 of Income Tax Ordinance, 2001. According to Section 154, an authorised foreign exchange dealer, banking company, an Export Processing Zone Authority, a direct exporter and an export house shall deduct tax at the rate specified in Division IV of Part III of First Schedule at the time of making payment to the exporter or commission agent or to the individual as the case may be. The tax deducted is taken as final tax payment. Following is a schedule outlining tax rates on exports and various industrial sectors.

Schedule 7 Part I Part II Part III

Percentage of Tax 0.75% 1% 1.25%

Description of Industrial Sectors Leather and textile made ups, Engineering goods, sports goods, etc. Refined / treated salt, Ground batteries, Granite blocks and slabs, etc. Raw cotton, Rice, Lamb skin, etc.

Deductions
After calculating the total income, various deductions have to be made in order to arrive at the total taxable income. The detail of which along with examples is given below: Section 40 (S40) Under this section a company is allowed to deduct any expenditure which he has made to earn taxable income and Zakat paid by a person on any profit obtained from debt which is taxable under section 39. Other deductions included are the depreciation of any plant, machinery or building used to derive income as per section 22, an initial allowance for any plant or machinery utilised to conclude income according to section 23 Section 17 (S17) Includes deductions such as house repair, insurance of property, rent paid on property, profit paid on money borrowed to construct or renovate property, etc. Section 56 (S56) According to this section a company is allowed to deduct business losses. The assessee is entitled to set off (adjustment of) his losses under any head of income against income chargeable to tax. If the loss cannot be completely adjusted, it would not be permitted to be carried forward to next tax year. Section 20 (S20) A Company can deduct all expenses, which he has made for obtaining taxable income.

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 Section 57 (S57) If the loss under head Income from Business cannot be adjusted completely under section 56, the amount of loss will be shifted to the next tax year and shall be set off against the same income head. No loss can be carried forward for more than six years. Section 58 (S58) The loss from any speculation business can only be adjusted against income from any other speculation business and if the loss is not completely set off, then that amount of loss can taken to the next tax year but not more than six years. Section 59 (S59) This section includes Capital Loses. The loss incurred under the head capital gains can only be adjusted under this and can be carried forward to the next tax year. Section 60 (S60) A company is entitled to deductible allowance for the amount of any Zakat paid under Zakat and Ushr Ordinance, 1980. Second Schedule These are exemptions from total income under different conditions. Therefore, the total deductions would be; S17 + S20 + S40 + S56 + S57 + S58 + S59 + S60 + II Schedule = Total Deductions

Collection of advance taxes by a company

For a company, it is required under section 50 to deduct, and deposit the advance income tax in the government treasury, at the time of making payments to other businesses. The various rates are given below: 3.5 % tax for supply of goods will be deducted at the time of payment to other businesses and deposited in the government treasury within 7 days of the day of deduction. 5% for rendering of services will be deducted from other businesses and deposited in the government treasury within 7 days of the day of deduction. 10% on payment of brokerage fees or commissions will be deducted for payments made to other businesses and deposited in the government treasury. Monthly average tax on the salary of an employee, if taxable, to be deposited within 7 days of the day of deduction.

The above mentioned advanced taxes are applicable to most of the companies. However there are other sub-sections of section 50, which are applicable to related cases. These sections are given from sections 50(1) to 50(10). The company has to keep the record of income tax deducted under section 165 (and deposit it along with tax payment challans (IT 31 A,B,C,D) and ledger accounts too.

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The company is also required to file a six monthly, quarterly and annual report of all deductions relating to advance taxes,3 to tax authorities. After deducting the above-mentioned deductions, the company will arrive at the total taxable income. Tax liability will be calculated on the basis of the following slabs:

Companies
Company Type Banking Company Rates 47%

Public Company other than a banking company 35%

(inclusive of surcharge)
Other Company(inclusive of surcharge) 43%

Deductions of various Advance Taxes from Tax Liability:

After computing the total taxable income of the business concern, the various advance taxes, which were paid in advance to the government, during the year, will be deducted from the income tax liability. Examples of more frequently deductible advance taxes as per various sections of the income tax ordinance are given below: Section 147 Includes advance tax to be paid by the taxpayer deriving income other than Capital Gains, Income from Property, dividends etc on quarterly basis. Section 148 It is advance tax collected by the Custom Collectorate @ 6% on imports. Section 151 This is the tax deducted on saving certificates or on debt @ 10%. Section 153 Includes tax on supply of goods at the rate of 3.5% and 5% on services etc. Section 233 (If Applicable) Includes advance tax deducted on brokerage or commission @ 5%.

Section 235 Tax collected on commercial or industrial electricity bills.

Advance Tax: The advance payment of tax is a scheme in which the assessee is required to pay tax in a particular financial year, preceding the assessment year, on the basis of his estimated income or the latest assessed income.
3

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 Section 236 Advance tax deducted on telephone bills. S147 + S148 + S151 + S153 + S235 + S236 + S233 (If Applicable)= Advance Taxes

Formula for Calculation of Final Tax Liability.

After completing the above mentioned procedure, the total tax liability can be summarised as; Step 1: Total Taxable Income = S18 + S39 + (S15 + 37) If Applicable Step 2: = Total DeductionsS17 + S20 + S40 + S56 + S57 + S58 + S59 + S60 + II Schedule So the total taxable income can be calculated by the formula: Total Taxable Income = S18 + S39 + (S15 + 37) If Applicable _ (S17 + S20 + S40 + S56 + S57 + S58 + S59 + S60 + II Schedule) Advance Taxes as mentioned above Step 3: The tax liability is then calculated on the basis of rates given below COMPANIES Company Type Banking Company Public Company other than a banking company (inclusive of surcharge) Other Company (inclusive of surcharge) Step 4: Adjustment of advance taxes deducted under section 147, 148, 151, 153, 154, 233, 235 and 236. Step 6: After completion of all these steps, the taxpayer shall arrive at his total tax liability, which he has to pay. Therefore, the final income tax liability formula is: Rates 50% 35% 45%

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Total Tax Liability = = S18 + S39 + (S15 + 37) If Applicable _ (S17 + S20 + S40 + S56 + S57 + S58 + S59 + S60 + II Schedule) _ Adjustments of Deductions mentioned under various sections stated above. After the above-mentioned procedure the company will arrive at the income tax liability/ refund. In case of liability, the amount of tax liability has to be submitted in the government treasury through State Bank of Pakistan or designated branches of National Bank of Pakistan on Tax payment Challan IT 31 (A,B,C,D) of which 4 copies are to be prepared. The distribution of the copies is as under: Two copies of the tax payment challan are kept by the National Bank of Pakistan. One copy to be attached with the Annual Income Tax return for Companies. Fourth copy to be retained by the company, for its official use.

In case of refund, a company can contact the Income Tax department to get the refund of tax, after filing the annual income tax return.

FILING OF ANNUAL INCOME TAX RETURN

After preparation and completion of annual income-tax return, it will be deposited along with a copy of tax payment challan, with the respective income tax department on or before of Sept 30th of the respective year. A detail of income tax offices in major cities is given in Annexure I. Acknowledgement on prescribed form will be taken from the income tax authority at the time of deposit of the said documents. Under section 165, a company has to provide the Income Tax authorities, a statement regarding payment of salary to its employees and tax deducted on there salaries, on a quarterly or six monthly basis. To file the income tax returns, a taxpayer needs to furnish the following documents to the income tax authorities: 1. 2. 3. 4. Form of return of total income under Income Tax Ordinance, 2001 Tax payment challans (IT 31 A, B, C, D). Statement U/S 115(4) - Statement of receipts / incomes subject to final taxation Copies of: a) Audited financial statements (income statement and balance sheet) in accordance with the provisions of the Companies Ordinance, 1984 or any other statute under which incorporated, registered, formed or constituted alongwith auditors' and directors' reports thereon. b) Charts of depreciation/amortization as admissible under the Income Tax Ordinance, 2001 5. Evidence of payment of Tax deducted/collected at source, Advance tax paid U/S 147, Expenditure on personal medical service, Zakat, Tax paid with return U/S 137

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6. Photocopies of tax payment challans in case of adjustment of advanced taxes deducted under Chapter X Part V and Chapter XII of Income Tax Ordinance, 2001. Please refer to Section 169 of Income Tax Ordinance, 2001 for details of cases that do not require furnishing return of income.

ASSESSMENT

After completing the above-mentioned procedure, the taxpayer will submit the return to income tax department and the return filed to the Income Tax Commissioner shall be considered as an assessment order by the Commissioner the day the return is filed. However, according to section 122 the Commissioner may amend the assessment order within period of five years by making alterations or additions to the return as he conceives necessary.

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ANNEXURE I
ADDRESSES OF INCOME TAX OFFICES IN MAJOR CITIES
Income Tax Offices in Lahore: Address: Income Tax Building, Syed Mauj Darya Road, Lahore. Fax number: 042-9211857 Income Tax Offices in Karachi: Address: Income Tax Office, Sharah-e- Kamal Attaturk, Karachi. Fax number: 021-2628624 Income Tax Office, Northern Region Islamabad Address: House no.110-H, Lukman Hakeem Road, Sector G-6/3, Islamabad. Fax Number: 051-9204904 Income Tax Office, Islamabad Address: Buland Markaz, Blue area Islamabad Fax Number: 051 -9203670 Income Tax Office, Rawalpindi Address: 12 Mayo Road Fax Number: 051-9270422 Income Tax Office, Gujranwala Address: Income Tax Department, GT Road, Gujranwala Fax Number: 0431- 291401 Income Tax Office, Sailkot Address: Income Tax Department, Katchehry Road, Sialkot Fax Number: 0432-267296 Income Tax Office,Peshawar Address: Income Tax Department, Jamrud Road, Peshawar Fax Number: 091-9216140 Income Tax Office, Multan Address: Income Tax Department, 57-B, Sher Shah Road, Multan Fax Number: 061-585219 Income Tax Office, Faisalabad Address: Income Tax Department, Opposite Allied Hospital, Sargodha Road Fax Number: 041- 761433

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Income Tax Procedure Of A Company

Policy Planning & Strategy

ANNEXURE II
SAMPLE FORMS

Form for NTN (IT-A) Form of Income Tax Returns (For Companies)

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Income Tax Procedure Of A Company

Policy Planning & Strategy

IT-A Application for the Issuance of National Tax Number (NTN) (For Registered Firms and Companies) Category (please tick one): Name of Business: (Please type in capital letters) Business Address: Registered Firm Company

Phone: (Res.) _________________________ (Bus.) _________________________ Fax: _________________________ Principal Business Activity: Manufacturer Importer Exporter Distributor Wholesaler Retailer Services Others

Description of Business: _________________________________________________________________________________ Principal place of business (address): ______________________________________________________________________ Company type Public Ltd. Private Ltd. Non-Resident Company Others (if yes, please specify) Reg./Inc. No: (Please attach copy of documents) Residential Status: Resident Non-Resident Old NTN (if any): Reg./Inc. No:

PARTICULARS OF PARTNERS/DIRECTORS 1. Name ____________________________________________________________________________________________ (Please attach attested copy of NIC) 2. Name ____________________________________________________________________________________________ (Please attach attested copy of NIC) 3. Name ____________________________________________________________________________________________ (Please attach attested copy of NIC) 4. Name ____________________________________________________________________________________________ (Please attach attested copy of NIC) 5. Name ____________________________________________________________________________________________ NTN: NIC: (Please attach attested copy of NIC) NTN: NIC: NTN: NIC: NTN: NIC: NTN: NIC:

(Use additional sheet if required) I, the undersigned solemnly declare that to the best of my knowledge and belief the information given above is correct and complete. Name: _________________________________________

Signature of the Principal Officer/Managing Partner

Designation: ___________________________ Official Seal: ________________________________ Date: _______________________

Note:Please make sure that all information is correctly filled-in and required documents are attached, especially the photocopies of NICs of all the Partners/Directors and Incorporation/Registration Certificate. Class-I gazetted officer or an officer of the bank should attest all documents. NTN certificate will not be issued if incomplete form is sent. In case the applicant is a Registered Firm or a Company, its application will not be entertained unless accompanied by applications of individual Partners/Directors who do not have an NTN.

Sent to: Business Development Manager NTN Center, CBR House, Constitution Avenue, Islamabad. Ph: 9207540 (Ext. 346)

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FOR COMPANIES ONLY FORM OF RETURN OF TOTAL INCOME UNDER THE INCOME TAX ORDINANCE, 2001 Write one letter (CAPITAL) or a digit in each box. Leave a blank box between each word
Circle Inward No./Date of Receipt

Tax Year Ending on

d d

Circle Inward No.

m m

y y y y

Zone
National Tax
No.

Circle Sales Tax

Registration No.

Signature, Name & Seal of Receiving Official

Company's
Registration No.

Date of
Registration
d d

(if any)

m m

y y y y

Name of Company Principal Place of Business Address Registered Office Address

Phone No.(s)

(i) (ii)

Phone No.(s)

(i) (ii)

Fax No. E-mail

Fax No.

Type of Company
(Use codes listed on page 4)

A
(Please mark

Type of Company *
in the relevant box)

Public or Private**

C Resident

Banking or Non-banking***

Residential Status Nature of business

Authorized representative, if any

Non-Resident Business code

(to be filled by the Dept.)

Legal Practioner

ITP

CA

C&MA

Others

Specify

SUMMARY OF RETURN Code

1. 2. 3. 4. 5. 6. Taxable Income Total Tax Chargeable Tax Deducted/Collected at source Advance Tax Paid U/S 147 Tax Paid with Return U/S 137 Value of Opening Stocks

Amount
7. 8. Purchases during the year Sales/Receipts during the year Value of Closing Stocks Gross Profit Net Profit Paid up capital of the Company
Income last Assessed / Declared (whichever is higher)

Code
3905 3901 3917 3919 3990

Amount

9199

9449 9459 9469 3916

9. 10. 11. 12. 13.

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PART I COMPUTATION OF INCOME Description (attach prescribed Annex II) Income/(loss) from Property Income/(loss) from Business (attach prescribed Annex III) Capital Gains (attach prescribed Annex IV) Income/(loss) from Other Sources (attach prescribed Annex V) Foreign income Total Income [ 1 to 5 ] Exclusions from income (attach evidence) (a) Zakat paid under the Zakat & Ushr Ordinance, 1980 (b) Workers welfare fund (attach evidence) (c) Others (Specify) (d) Total exclusions [ a to c ] 8. Taxable Income [ 6 minus 7(d) ] 1. 2. 3. 4. 5. 6. 7.
9. Assessed business loss b/f from preceding year 10. Assessed business Loss c/f to next year 11. Assessed unabsorbed depreciation b/f from preceding year 12. Assessed unabsorbed depreciation c/f to next year

Code 2999 3999 4999 5999 9098 9099 9121 9125 9138 9139 9199

Amount

PART II COMPUTATION OF TAX Description / Particulars 1. Taxable Income [ as per part I ] 2. Gross income tax (attach prescribed Annex VI) 3. (a) Income tax reductions (attach prescribed Annex VI) (b) Income tax credits 4. Income tax [ 2 minus { 3(a) + 3(b) } ] 5. Minimum tax U/S 113 or U/S 148(8) 6. Tax chargeable [ 4 or 5 (whichever is higher) ] 7. Additional tax U/S 205 8. Workers Welfare Fund 9. Total [ 6 to 8 ] (attach prescribed Annex VII) 10. (a) Tax deducted/collected at source (b) Advance tax paid U/S 147 (c) Tax paid with return U/S 137
(d)
Adjustment of prior year(s) refunds
(attach year wise details with dates of determination by the department)

Code 9201

Amount

9301 9302 9399

9449 9459 9469 9499 9999

11. Tax payments [ 10(a) to 10(d) ] 12. Tax payable / refundable [ 9 minus 11 ]

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PART III INCOME CLAIMED TO BE EXEMPT AND NOT INCLUDED IN TOTAL INCOME
Nature of Income 1. 2. 3. 4. 5. 6. Total [ 1 to 5 ] State relevant provisions of law Code Amount

DOCUMENTS ATTACHED
Please mark for the documents attached
IV V VI VII

1. Prescribed Annex

II

III

2. Statement U/S 115(4) - Statement of receipts / incomes subject to final taxation 3. Copies of: - (a) Audited financial statements (income statement and balance sheet) in accordance with the provisions of
the Companies Ordinance, 1984 or any other statute under which incorporated, registered, formed or constituted alongwith auditors' and directors' reports thereon.

(b) Charts of depreciation/amortization as admissible under the Income Tax Ordinance, 2001 4.
Evidence of (a) Tax deducted/collected at source payment of:(d) Zakat. (b) Advance tax paid U/S 147 (e) Workers Welfare Fund (c) (f)
Tax paid with return U/S 137 Donations/investment in shares etc. (for tax credits)

5. In case of a new taxpayer (without an NTN), NTN Registration Form 6. Any other document (specify) 7. Number of documents attached
Note: 1. 2. If any of the documents prescribed under the Income Tax Rules as part of the return are not enclosed, the return is liable to be considered as invalid return under the law. Use additional sheets where necessary.

VERIFICATION (See Note 1 below) I, the undersigned, solemnly declare that to the best of my knowledge and belief: a. the information given in this Return and the Annex(es) and the accompanying statement(s) are correct and complete;
b. c. The amount of income and other particulars are truly stated; during the year for which this Return is made i. no other income was received, or can be treated to have been received (other than that for which a statement of receipts/incomes subject to final taxation has been separately filed); ii. no other income accrued or arose or can be treated to have accrued or arisen; iii. no legally inadmissible deduction / expenditure has been claimed; and iv. the company had no other source of income; and d. the following books of account, documents and records as required by Section 174 of the Income Tax Ordinance, 2001 read with Rule 29 to 32 of the Income Tax Rules, 2002 thereto have been maintained for the tax year under consideration:(i) (ii) (iii) (iv) (v) (vi)

I, further declare that I am competent to make this Return and verify it in my capacity as _______________________________ of ___________________________________________________________________________________(see Note 2 below) Name Date
d d

Signature
(in block letters) (of the Taxpayer)

m m

y y y y

NIC No.

Note:

1. 2.

The alternative in the verification which are not applicable should be scored out. The verification should be signed by the Principal officer/or Chief Executive of Company.

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*Com pany Codes

Com pany form and registered under the Com ed panies Ordinance, 1984 or any other lawrepealed there under Body corporate form by or under any lawin force in ed Pakistan Modaraba as defined in the M odaraba Com panies and Modarabas (Floatation and Control) Ordinance, 1980 Body incorporated by or under the lawof a country out-side Pakistan relating to incorporation of com panies Trust (Other than a unit trust)

10 20 30 40 51 52 61

Co-operative Society (Other than a Finance Society) registered under any other lawfor the tim being in force e Finance Society registered under the Co-operative Societies Act, 1925 Finance Society registered under any other lawfor the tim e being in force Any other society (other than Co-operative or Finance) established or constituted by or under any lawfor the tim e being in force Foreign Association, whether incorporated or not, declared by CBR to be a com pany Provincial Governm ent

62 63 64 65 70 80 90

Unit Trust

Co-operative Society (Other than a Finance Society) registered under the Co-operative Societies Act, 1925

Local authority in Pakistan

** Public Com pany Codes

A com pany in which not less than 50%shares are held by the Federal Governm ent A com pany whose shares are traded on a recognized stock exchange in Pakistan and rem ained listed at the end of the tax year

001 002

Unit trust whose units are widely available to the public

003 004

Any other public trust

** Private Com pany Code

A Com pany which is not a public com pany

009

*** Banking Com pany Codes

As defined in the Banking Com panies Ordinance, 1962

*** Non-banking Com pany Code 0001 0002

A com pany which is not a banking com pany

0009

A body corporate which transacts the business of banking in Pakistan

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