LAW OF TAXATION

INTRODUCTION:-
LAWS:- Rules of conduct enforced and imposed by the SOVEREIGN.(supreme
power)(law of the land)(PARLIAMENTARY SYSTEM)

INCOME TAX LAWS IN PAKISTAN:-

1. Laws are enforced by the (i) historical means (precedent) or by (ii) legal
procedure.
2. Article 70-76 of the constitution of Pakistan deals with the legislation
procedure, termed as “__ACT_____”
3. Article 89 of the constitution of Pakistan empowers the president of
Pakistan to promulgate laws (when assembly is not in session), termed as
“___ORDINANCE____”.
4. Article 77 of the constitution of Pakistan empowers the federal government
of Pakistan to levy income tax for the purpose of federation.

PILLARS OF THE STATE.

1. LEGISLATIVE (maker of laws).
2. EXECUTIVES (implementation).
3. JUDICIAL (judgment of interpret).

HISTORY OF INCOME TAX IN PAKISTAN .

1. Fiscal year:
Before 1960, 1st April – 31st March
In 1960, 1st July – 30th June

2. Income tax act 1922

3. Income tax ordinance 1979.
4. Income tax ordinance 2001.
On 13th September 2001
SRO- 15 June 2002 (STATUTORY REGULATORY ORDER)
Commencement – 1st July 2002.

PURPOSE:- The preamble (PREFACE) of income tax ordinance specify the

imposition of income tax.
LEARNING OBJECTIVES:-
1. Income calculation
2. Tax calculation

LEGISLATION PROCEDURE
Components of parliament:
1. President
2. Houses

When assembly is in session When assembly is not in session

BILL PRESIDENTIAL POWER

TEMPORARY BILL PERMANENT BILL

UPPER HOUSE LOWER HOUSE ORDINANCE

(SENATE) (PARLIAMENT)
NATIONAL ASSEMBLY

PRESIDENT

ACT
GIDC__ GAS INFRASTRUCTURE DEVELOPMENT CESS

BASIC FEATURES OF INCOME TAX ORDINANCE

 Chapter -13
 Schedules - 8
 Sections - 240
 Sub sections
 Clause
 Sub clause.
1(1)(A)(i)
TYPES OF TAX
1. Direct tax
2. Indirect tax.

DIRECT TAX:- when the burden and incidence (occurrence) is on the same person
e.g. utility bill

INDIRECT TAX:- when the tax paid by other person and incurred is on other
person e.g. sales tax.

CHAPTER NO 01
PRELIMINARY
SECTION 01:
i. Short title --------- Income Tax Ordinance 2001
ii. Applicability -------- All over Pakistan
iii. Date of commencement -------- 1st July 2002

SECTION 02:
DEFINITIONS
i. Ordinance assigns specific meanings for terms.
ii. Meanings are only for income tax ordinance.
iii. May have other meanings/ usage in any other law.

SECTION 03:
Income Tax Ordinance to override any other law enforceable in Pakistan.
SALARY—ON CASH BASIS
 CHAPTER NO 02
CHARGE OF TAX

SECTION 04:
“INCOME TAX shall be imposed for each TAX YEAR on each and every PERSON
who has TAXABLE INCOME”