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Scope of Tax
Scope of Tax
Synopsis of Tares
CHAPTER-3
SCOPE OF TAX
CHARGE OF TAX (41
such income, during the tav
upon a person deriving ye
tax is an annual charge
of the Income Tax Ordinance, 2001r
Income
which is chargeable to tax under any provision 2001. This
Ordinance requires a person to:
Educationallonses
Educatioin expens
SynopsIs9 cope of Tax
tax tax so so
compute
by the amount of person under the First
The
taxpayer. The. Iltant figure shall be the amount of
tax
any tax credits Schedule
available
payable or refundable to the
SeparateTax Reaime (STR) IS that
metnod or
head
any head
unde of income, rather, aretaxation
kept
under which certain incomes are not
included
tax rates (other than the nomal tax rates separate and
charged to tax
special
so
calculated shall be the tax
payable on
applicable incomes under NTR) some
to at
amount such income. It The
ons, deductible allowances or tax credits shall not be reduced by
any otherwise available to the
Taxunder this regime is added in the amount of tax for the taxpayer
year under NTR and thus total
tax for
the year is computed.
The amount treated as income is not reduced by any deductions and deductible
t shall not be indluded in total income and no tax credits shall be allowed against tax
computed under this regime.
Minimum Taxation (MTR) is that method of taxation under which the tax deducted or
collected at source is treated as minimum tax in respect of such incomes. Under this regime.
the tax liability of a person shall be the higher of the tax under:
TAXABLE INCcOME (9, 60, 60A, 60B, 60C &60D] Taxable income is
for a tax year.
person is liable to pay his taxable income
income tax on
no
. income
shall
Due to deductible allov Ices the taxable
than the
total
income,
[3-571
ncOmes, profits or gains chargeable to tax under
any of the head of income
1. specified in the Income Tax Ordinance, 2001.
v) 154 (exports):
156 (prizes and winnings);
vi)
vii) 156A (sale of petroleum products to petrol pump operators);
vil) 233 (payment of brokerage and commission); and
ix) 234(5) (collection from transporters in respect of the vehicles owned by them).
Any amount treated as income under any provision of the Income Tax Ordinance
3 2001.
44 Any Ioss of above-stated incomes, profits or gains.
It is a negative income and may be adjusted against other incomes during the tax
year.
TOTAL INCOME (2(69), 10 & 11]
Total income of a person for a tax year means the total of his following incomes
1. Incomes under each of the following heads of income
i) Salary
i) Income from property;
i) Income from business:
a) Non-speculation business;
to tax under
a specific head of
. a r e chargeable
allowed under
law. [11(2))
Such incomes which deductions of
collectively by considering the to tax under a head
ined chargeable
2 deductions exceed
the incomes
loss under
that head. [11(3)
inco Owable
n e excess amount of
deductions shall
be a
provisions
laid down in
the
the
3. A according to
A loss forward
may be set-off or carried
Income
ncome Tax Ordinance. [11(4))
IncomeTax - Scopeof
Tax 13-58
Synopsis of Taxes separate head of incon
shall be
treated a s a come
Business'
Speculation
For all purposes
4. a s are
taxable under No mal
[19(1) total income'
shall become part of
such incomes
5. Only
Tax Regime (NTR).
60B, 60C & 60D]
ALLOWANCE [2(16), 60, 60A, total income in order t
DEDUCTIBLE deductible from
allowance that is
an
Deductible
allowance' m e a n s
arrive at the
taxable income. made by a person during the tav
of any amount pa o
An individual shal be entitled to a 'deductible allowance' in respect
the