Income Tax Return

Filing
Prepared by
Tax Pros
03077990003
Basic
Information PART I

Required
Basic Information Required to proceed

• IRIS ID Password
• Salary Income (Tax Deduction Certificate)
• Business Income, Details of income and tax deducted if any
• Profit on debt (interest)/any other short-term investment (T bills etc) – Tax Deduction
certificate from bank
• Details of any other income
• Details of Investment (buy and sell)- Tax Deduction certificate
• Details of expenses done
• Donation paid to approved institution
• Educational expenses of children (not required if you consider that your income will
be more than 15 lac for the year)
• Details of amount paid in respect of life/ health insurance
Basic Information Required to proceed

• Details of Taxes deducted on

o Salary o Sales (Business)
o Internet bill o Import
o Mobile phone bill o Foreign remittance
o Telephone bill o Any other tax deducted
o By banks on transactions, interest
etc
o Car purchase
o Property purchase/sell
Basic Information Required to proceed

• Details of assets
o Bank balance
o Loans/other liabilities
o Asset statements (for investment in
shares/mutual fund)
o Properties  Details of assets purchased/sold during the
o Cars year
 Details of foreign remittance from abroad
o Jewelry
 Any amount received as inheritance / gift
o Other assets (mobiles, etc.)
o Cash Approximately
Changes In
Income Tax PART II

Laws
 Federal Budget 2021-22

Amendments in Tax Laws

Existing Law Amendment

➢ Interest Income below 36 Million is subject to Final Tax.
Interest income above 36 Million is taxable at normal
rates
Profit on
Debt ➢ Tax rate of 15%, 17.5% and 20% is currently applicable on ➢ Constant rate of 15% will now be applicable (for income
PoD below 36 million
(PoD)
➢ The reduced rate of withholding tax of 10% was
applicable on profit on debt where yield or profit paid is
Rs 500,000 or less.(Certificate was required)
➢ The threshold of Rs 36 million is reduced to Rs 5 million.
Therefore, if Interest income now exceeds 5 million it will
be taxable as normal income
below 5 million).
➢ Reduced rate provision is withdrawn. Consequentially,
the rate of withholding tax even on yield or profit of Rs
500,000 or less in a tax year shall be 15%.

PoD on ➢ Fixed tax rate at 15%.

➢ Profit on debt on Federal Government Securities was
Government
taxable at above rates ➢ Threshold mentioned above not to apply on such profit
Securities
➢ Rate of tax on CGT was previously prescribed at 15% ➢ The rate of Capital gain has now been reduced to
Capital Gain 12.5%
u/s 37A ➢ Capital Gains include gain on sale of listed companies,
before maturity selling of T Bills etc.
➢ Currently, individuals can opt for their property income ➢ After the amendments, property income for all
to be chargeable to tax on gross rent without any taxpayers shall be subject to uniform taxation on net-
Income from
deductions, at specified (lower) tax rates. income basis at the applicable rates i.e. gross rent
Property taxability option has now been revoked
➢ Where under any other head of income, a person suffers
(Rental ➢ Taxpayers can now adjust their losses from other heads
a loss, he cannot adjust this loss against Income from
Income) property earned during the year (where taxpayer opts against income derived from rent.
to be taxed on net income basis) ➢ WHT rate on rent have also been revised.
 Federal Budget 2021-22

Amendments in Tax Laws

Existing Law Amendment
➢ Following Rates will now be applicable
Tax Rate Holding Period
Gain Existing Proposed Period Rate
➢ Gain on disposal of properties are taxed at special
Capital Gain (reduced) slab rates along with reduction in gain upto 5 Million 2.5% 3.5% Less than 1 yr 100%
based on holding period. 5-10 Million 5% 7.5% 1 yr - 2 yr 75%
on Disposal of
10-15 Million 7.5% 10.0% 2 yr - 3 yr 50%
Immoveable ➢ Gains on disposal of immovable properties held
15 Million + 10% 15.0% 3 yr - 4 yr 0%
property for more than four years are effectively non-
More than 4 yr 0%
taxable
➢ E.g. Property purchased for Rs 4 Mn and sold after 2 years 8
months for Rs 13Mn, gain is (13-4) 9 Mn
➢ Tax payable= 9Mn x 50% x 7.5%=0.3375Mn
➢ A resident individual is liable to pay Income Tax in
Pakistan for his Foreign income (earned abroad)
as well as Pakistan sourced Income. ➢ Through the Act, above criteria has been omitted

➢ In 2019, definition of resident individual was ➢ This is likely to provide relief to expatriate Pakistanis who
Resident amended to include an individual who is: frequently visit Pakistan mostly for leisure and to remain
Individuals connected with their families in Pakistan.
❑ present in Pakistan for 120 days or more in
the tax year and ➢ Such persons will not be liable to pay tax on foreign income
earned by them from abroad in Pakistan
❑ in 4 previous years, has been in Pakistan for a
total period of 365 days or more.
Electronic
➢ Refund application is required to be filed in order ➢ Now refunds can also be processed electronically. This
Issuance of
to claim refund in cash or through adjustment would not even require filing of refund application.
Refunds
 Federal Budget 2021-22

Amendments in Tax Laws

Existing Law Amendment
➢ It is decided that no gain or loss shall arise in the hands of
transferor where the transferee is a non-resident person to
whom an asset is being transferred under the following
Disposal of
circumstances:
Assets to ➢ Assets transferred to nonresident persons were
Non- taxable without any exception (a) Spouses under an agreement to live apart;
Residents (b) Transmission of asset to an executor or beneficiary on
death of a person; and
(c) Gift of asset to a relative [defined in Section 85(5)].
➢ The list of exclusion has now been extended to:
(a) an ancestor, a descendant of any of the
➢ Currently, gifts received were taxable other than
Taxability on grandparents, or an adopted child, of the individual,
those received from grandparents, parents,
Gifts or of a spouse of the individual; or
spouse, brother, sister, son or a daughter.
(b) a spouse of the individual or of any person specified
in clause (a).
➢ Currently, when a gift is given from a relative, the ➢ It is now decided that where such asset is disposed of by the
new cost of the asset is taken to be the FMV of the gift recipient:
gift. This had two benefits
❖ before 2 years of the acquisition and
Tax ❖ Non taxability on gift transfer; and
Avoidance ❖ the Commissioner is satisfied that the gift arrangement
❖ Cost of asset at the hands of recipient is part of a ‘tax avoidance scheme’,
on Gifts
increased therefore reducing capital gain
➢ then such asset in the hands of the transferee will be treated
on subsequent disposal
to be of the same cost as that in the hands of the transferor
at the time of transfer and not fair market value.
 Federal Budget 2021-22

Amendments in Tax Laws

Existing Law Amendment

Salary ➢ Special allowance , medical allowance, interest on ➢ The proposed changes were not accepted.
Changes profit on debt was proposed to be made taxable. Accordingly, no impact on EPCL employees for now.

Criminal ➢ No such provision previously existed

➢ Applicable where the concealment has resulted in non-
proceedings ➢ Provisions have been inserted for arrest and prosecution
payment of tax of Rs.100 million and above in case of a
on Income of persons who are involved in concealment of income filer and Rs. 25 million or above in case of non-filer .
concealment whether of their own or of the Company they represent.

➢ Advance tax collection prescribed for industrial, ➢ Revised rates are as follows:
commercial and domestic consumers of electricity is
Electricity proposed to be revised as follows:
Consumption
by Domestic
consumers

Telephone ➢ Currently, tax is collected at the rate of 12.5% in the

➢ This is proposed to be reduced to 10% for tax year 2022
and Internet case of subscriber of internet, mobile telephone and
and 8% for onwards.
Users pre-paid internet or telephone card.
 Federal Budget 2021-22

No Withholding Taxes Now!

SR Description Section
1. Cash withdrawal from a bank 231A
2. Advance tax on transactions in bank 231AA
3. Collection of tax by a stock exchange registered in Pakistan 233A
4. Collection of tax by NCCPL 233AA
5. Advance tax on purchase of air ticket 236B
6. Advance tax on purchase of international air ticket 236L
7. Advance tax on banking transactions otherwise than through cash 236P
Advance tax on persons remitting amounts abroad through credit or debit or
8. 236Y
prepaid (e.g. Netflix payment)
9. Purchase of used Motor vehicle from general Public 153
10. Payment on transmission of electricity 153
11. Import of Motor vehicles upto 1000cc in CBU condition 148
 Federal Budget 2021-22

Frequently Used Terms

Term Explanation

Tax deducted by banks / employers etc. This may or may not be on taxable amount.
These can be claimed while filing tax returns. This is just cash outflow which can be
Withholding Tax
claimed by return filers while they file tax return. E.g. Income Tax on electricity bills can
help you reduce your tax payable

This is usually slab rates for individuals. There are 2 slabs for Individuals:
Normal Tax Rate • 75% + taxable income is from salary
• Less than 75% taxable income is from salary

Any income falling under Final / Fixed Tax Scheme is charged to tax at the rate stated
Final / Fixed Tax and not on normal tax rate mentioned above e.g., Profit on debt, selling of property
etc

Any person who files his return on time is usually added in ATL. If any one is not
appearing in ATL, Withholding tax deducted on such person is usually doubled.
Active Taxpayers List
Any person who fails to file his return on time can still enter ATL after paying default
(ATL)
charge of
Rs 1,000.
 Contact us at:
03077990003
Email id: taxprospk@gmail.com

THANK YOU!!!