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Tax Concepts PDF
Tax Concepts PDF
of Tax on Income
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Brochure – IR-IT-01
Updated April, 2014
Introduction
Contents Page
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Brochure – IR-IT-01 updated June, 2013 Basic Concepts of Tax on Income
Facilitation and Taxpayer’s Education Wing (FATE)
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Brochure – IR-IT-01 updated June, 2013 Basic Concepts of Tax on Income
Facilitation and Taxpayer’s Education Wing (FATE)
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Brochure – IR-IT-01 updated June, 2013 Basic Concepts of Tax on Income
Facilitation and Taxpayer’s Education Wing (FATE)
Tax year includes special tax year, which - Services of stitching, dying, printing,
means any period of twelve months and is embroidery, washing, sizing and
denoted by the calendar year relevant to the weaving
normal tax year in which closing date of the - Media services by non-residents
special tax year falls. For example, tax year for - Export realization (goods)
the period of twelve months from January 01, - Commission / discount on petroleum
2010 to December 31, 2010 shall be denoted by products
calendar year 2011 and the period of twelve - Brokerage and commission;
months from October 01, 2010 to September 30, - Plying of goods transport vehicles; and
2011 shall be denoted by calendar year 2012. - Natural Gas Consumption (CNG
Stations).
A person or class of persons may shift from
Normal to Special Tax year or vice versa subject Income arising from other sources on
to the conditions specified under section 74 of account of:
the Income Tax Ordinance, 2001.
- Profit on debt; (except derived by a
Income subject to a separate charge, which company) and
do not form part of total income or taxable
income and are subject to tax on the basis of - Prizes and winnings.
gross income, e.g.:-
Fee for technical services of non-resident; “Separate block of income” are those, which are
chargeable to tax under the respective head of
Shipping income of non-resident; and income (salary, business, capital gains and other
sources) but for the purposes of calculation of tax
Air transport income of non-resident. such incomes are excluded from the taxable
income and tax thereon is calculated and charged
For further details, please refer to our brochure at varying rates depending on the nature of each
“Income subject to separate charge, final tax such income e.g.:-.
and fixed tax regimes of Income Tax”. Income arising from salary in respect of:
Income subject to Final Tax, which are subject - Retirement or termination benefits of an
to collection or deduction of tax at source and employee;
such tax collected or deducted at source is - Arrears of salary of an employee; and
treated as final tax liability in respect of such - Flying and submarine allowance of
income e.g.: certain employees.
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Brochure – IR-IT-01 updated June, 2013 Basic Concepts of Tax on Income
Facilitation and Taxpayer’s Education Wing (FATE)
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Brochure – IR-IT-01 updated June, 2013 Basic Concepts of Tax on Income
Facilitation and Taxpayer’s Education Wing (FATE)
Expenditure exceeding Rs. 10,000 incurred the expenditure has to apportioned on any
and paid otherwise than by a crossed reasonable basis taking account the relative
cheque drawn on a bank or by crossed bank nature and size of the activities to which the
draft or crossed pay order or any other amount relates. Rule 13 of the Income Tax
crossed banking instrument showing Rules, 2002 specifies how to apportion such
transfer of amount from the business bank common expenditures.
account of the taxpayer.
Obligations to furnish income tax declarations
However, this does not apply to the – refer to our brochure “Obligation to file Income
following: Tax Declarations”.Tax having been deducted at
source does not absolve from filing a tax
- Where expenditures under a single declaration or a tax return.
account head in aggregate does not
exceed Rs.50,000; Loan, advance, deposit or gift received from
another person otherwise than:
- Expenditures on account of –
By a crossed cheque drawn on a bank; or
Utility bills;
Through a banking transaction from a
Freight charges; person holding a National Tax Number
Travel fare; Certificate;
The derivation of income chargeable to tax Receipt of rent of land or building by the
under a head of income and to some other employee or any of his/her family members,
purpose,
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Brochure – IR-IT-01 updated June, 2013 Basic Concepts of Tax on Income
Facilitation and Taxpayer’s Education Wing (FATE)
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Brochure – IR-IT-01 updated June, 2013 Basic Concepts of Tax on Income
Facilitation and Taxpayer’s Education Wing (FATE)
Sales Tax
Sales Tax Act, 1990;
Sales Tax Rules, 2006;
Sales Tax Special Procedure Rules, 2007;
Sales Tax Special Procedure (Withholding) Rules, 2007
Sales Tax Notifications (SRO‟s issued by the Federal Government);
Sales Tax General Orders;
Sales Tax Circulars/Rulings (Clarifications issued by the Federal Board of Revenue);
Sales Tax Forms (Registration form, return forms, tax deposit form);
Computer Software (Refund claim);
Publications and brochures
FATE
“Facilitation and Tax Education“
is the key to Voluntary Compliance
and
Voluntary Compliance is the key to
“Better Revenues”
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Brochure – IR-IT-01 updated June, 2013 Basic Concepts of Tax on Income