Lecture #5

Important
Definitions/Concepts
Types of Definitions
 Exclusive or Exhaustive Definitions
 Inclusive Definitions
 Exclusive as well as Inclusive Definitions
Rules of Interpretation or
Construction of Statutes

A. Internal Aids
B. External Aids
 Lecture # 5
Important Definitions/ Concepts

 Today’s Agenda:
• Special Tax year
• Person
• Tax on Income
• Scope of Income
• Heads of Income
• Different Accounting Methods
Important Definitions/Concepts
 Tax Year:
Sec. 2(68) read with Sec. 74 Tax year means a period
of 12 months ending on June 30th which is also called
Normal Tax Year.
Important Definitions/Concepts
 Special Tax Year:
in case a person has a different accounting period
from normal tax year or adopted such a period after
seeking approval from commissioner under section
74(3) it is called Special Tax Year.
Important Definitions/Concepts
 Explanation: a tax year can be a

period of less than 12 months under

special circumstances for example

discontinuance of business u/s 117.

Important Definitions/Concepts
Person Sec. 2(42)
 Person Sec. 2(42) read with section 80.
Person includes:
 An individual
 A company or association of persons incorporated or
formed in Pakistan or elsewhere; and
Important Definitions/Concepts
Person Sec. 2(42)
 The federal Government, a foreign

government, a political sub division of

foreign government, or public

international organization
Important Definitions/Concepts
Person Sec. 2(42)
 For the purpose of the above:
a) “An association of persons” includes a firm, a
Hindu Undivided Family, any artificial juridical
person and anybody of persons formed under a
foreign law, but doesn’t include a company.
Important Definitions/Concepts
Person Sec. 2(42)
a) “ Company means
• A company as defined in companies ordinance,
1984
• A small company as defined in sec. 2(59A)
• A body corporate formed by or under any law in
force in Pakistan;
• A modarba
Important Definitions/Concepts
Person Sec. 2(42)
• A body incorporated by or under the law of a
country outside Pakistan, relating to
incorporation of companies;

• A trust, a cooperative society or a finance society

Important Definitions/Concepts
Person Sec. 2(42)
• A foreign association whether incorporated or not,
which the central board of revenue has, by general
or special order, declared to be a company for the
purpose of this ordinance;
• A provincial govt. ;
• A local authority in Pakistan
Important Definitions/Concepts
Person Sec. 2(42)
C) Firm means the relation between persons who
have agreed to share the profits of a business
carried on by all or anyone of them acting for all;
Important Definitions/Concepts
Person Sec. 2(42)
d) Trust means an obligation annexed to the
ownership of a property and arising out of the
confidence reposed in and accepted by the owner,
or declared and accepted by the owner for the
benefit of another, or of another and the owner,
and includes a “unit trust”; and
Important Definitions/Concepts
Person Sec. 2(42)
e) “unit trust” means any trust under which
beneficial interest are divided into units such that
the entitlements of the beneficiaries to income or
capital are determined by the number of units
held.