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Taxation Management – FIN 623

VU

MODULE 3 LESSON 3.6 IMPORTANT DEFINITIONS Sec. 2(66) “Taxpayer” means any person who derives an amount chargeable to tax under this ordinance; o Any representative of a person who derives an amount chargeable to tax under this ordinance o Any person who is required to deduct or collect tax under part V of chapter X and chapter XII o Any person required to furnish a return of income or pay tax under this ordinance. Exercises on determination of Tax Year Exercise 1: Determine Tax year relating to following accounting period: A 1st July 2002 to 30th June 2003 B 1st July 2003 to 30th June 2004 C 1st July 2004 to 30th June 2005 Answers: A— Tax year 2003 B— Tax year 2004 C— Tax year 2005 Exercise 2: Determine tax year pertaining to accounting periods given here under: Sr A Classes of Tax Payers Mr. Aslam, a rice exporter Accounting Period (i)1st Jan 03 to 31st Dec 04 (ii)1st Jan 05 to 31st Dec 05 (iii)1st Jan 06 to 31st Dec 06 (i)1st April 02 to 31st Mar 03 (ii)1st April 03 to 31st Mar 04 (iii)1st April 04 to 31st Mar 05 (iv)1st April 05 to 31st Mar 06 (i)1st Oct 03 to 30th Sep 04 (ii)1st Oct 04 to 30th Sep 05 (iii)1st Oct 05 to 30th Sep 06 (i)1st Jan 02 to 31st Dec 02 (ii)1st Jan 03 to 31st Dec 03 (iii)1st Jan 04 to 31st Dec 04 (iv)1st Jan 05 to 31st Dec 05

B

Mr. Kamal, a manufacturer of shawls.

C

M/S XYZ, a company manufacturing sugar.

D

M/S ABC, Insurance Company.

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Commissioner can withdraw the permission granted to adopt a special Tax year in respect of a tax payer. if in the opinion of CIT it is not feasible. A tax payer can adopt a special Tax year after seeking approval from Commissioner of Income Tax (CIT).Taxation Management – FIN 623 VU Answer E-2: The tax years in the above exercise are special tax year. A (i) A (ii) A (iii) B (i) B (ii) B (iii) B (iv) C (i) C (ii) C(iii) D (i) D (ii) D (iii) D (iv) Special Tax year 2005 Special Tax year 2006 Special Tax year 2007 Special Tax year 2003 Special Tax year 2004 Special Tax year 2005 Special Tax year 2006 Special Tax year 2005 Special Tax year 2006 Special Tax year 2007 Special Tax year 2003 Special Tax year 2004 Special Tax year 2005 Special Tax year 2006 Tax Year – Points to Remember • • Normal Tax Year starts from 1st July and ends on 30th June (a period of twelve months). A Tax Payer using special Tax year may revert to Normal Tax Year after seeking approval from Commissioner of Income Tax (CIT). • • 14 Copyright © Virtual University of Pakistan . But CIT must notify the tax payer the reasons in writing for withdrawal of permission granted to tax payer.