CONTROL SHEET OF CHARGE OF TAX & 4 KEY CONCEPTS

PREPARED BY SIR TARIQ TUNIO THE TAXMAN (ARTT 0332-2130867)

Income tax shall be imposed for each tax year, at rate or rates specified
CHARGE OF TAX in First Schedule, on every person who has taxable income for the year.

PERSON TAXABLE INCOME TAX YEAR TAX RATES

MR. TAXPAYER TYPE PROVISION SALARIED PERSON

(i) Individual (ii) AOP (iii) Company (iv) Federal Government
COMPUTATION OF TAXABLE INCOME & TAX LIABILITY
(v) Foreign Government (vi) Political Subdivision of Foreign FOR TAX YEAR 20X1 Normal Tax  Period of 12 months S.
TAXABLE INCOME RATE OF TAX
NO
Government (vii) Public International Organization A SALARY Year ending on 30th June Where TI does not exceed Rs. 0%
 denoted by calendar 1
PSI FSI 600,000
Amounts Chargeable XX XX year in which said 2
Where TI > Rs. 600,000 but 5% of the amount exceeding Rs.
PERSON WHEN RESIDENT [No deduction Allowed] — — date falls does not exceed Rs. 1,200,000 600,000
Where TI > Rs. 1,200,000 but Rs. 30,000 plus 10% of the amount
Income under the Head ‘Salary’ XX Special Tax  Period of 12-months 3
does not exceed Rs. 1,800,000 exceeding Rs. 1,200,000
Individual  Presence in Pakistan of 183 days or more in different from NTY
B INCOME FROM PROPERTY Year Where TI > Rs. 1,800,000 but Rs. 90,000 plus 15% of the amount
aggregate in a TY, or 4
Amounts Chargeable XX XX that person is allowed does not exceed Rs. 2,500,000 exceeding Rs. 1,800,000
 Employee/official of Federal/Provincial Less: Deductions Allowed (XX) (XX) by CIR by order, & 5
Where TI > Rs. 2,500,000 but Rs. 195,000 plus 17.5% of the
does not exceed Rs. 3,500,000 amount exceeding Rs. 2,500,000
Govt. posted abroad Income under the Head ‘Income from Property’ XX  denoted by calendar
Where TI > Rs. 3,500,000 but Rs. 370,000 plus 20% of the
AOP  Control & Management of the affairs of C INCOME FROM BUSINESS year relevant to NTY 6
does not exceed Rs. 5,000,000 amount exceeding Rs. 3,500,000
AOP is situated wholly or partly in Pakistan (I) Business Income Other Than Speculation Business in which the closing Where TI > Rs. 5,000,000 but Rs. 670,000 plus 22.5% of the
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at any time during the year Amount Chargeable XX XX date of the STY falls does not exceed Rs. 8,000,000 amount exceeding Rs. 5,000,000
Less: Deductions Allowed (XX) (XX) Transitional  Period that comes Where TI > Rs. 8,000,000 but Rs. 1,345,000 plus 5% of the
Company  Company incorporated/ formed by or 8
does not > Rs. 12,000,000 amount exceeding Rs. 8,000,000
PSI/FSI Business Income (other than SB) XX XX Tax Year between end of last Where TI > Rs. 12,000,000 but Rs. 2,345,000 + 27.5% of the
under Pakistani law 9
(Ii) Speculation Business TY prior to change & does not > Rs. 30,000,000 amount exceeding Rs. 12,000,000
 Control & Management of the affairs of Amount Chargeable XX XX date on which Where TI > Rs. 30,000,000 but Rs. 7,295,000 + 30% of amount
company is situated wholly in Pakistan at 10
Less: Deductions Allowed (XX) (XX) changed TY does not > Rs. 50,000,000 exceeding Rs. 30,000,000
any time in the year PSI/FSI SB Income XX XX commences 11
Where TI > Rs. 50,000,000 but Rs. 13,295,000 + 32.5% of amount
does not > Rs. 75,000,000 > Rs. 50,000,000
 Provincial Government Income under the Head ‘Income from Business’ XX
Where TI > Rs. 75,000,000 Rs. 21,420,000 + 35% of the
 Local Government D CAPITAL GAIN PROCEDURE FOR TRANSITION 12
amount > Rs. 75,000,000
Fed. Govt.  Always Resident Person (I) CG on Disposal of Capital Asset other than Immovable Property →Person having NTY/STY apply to CIR
Consideration received XX XX to allow him to use STY/NTY NON-SALARIED PERSON
Foreign Govt.  Always Non-resident Person L: Cost of Capital Asset (XX) (XX) → CIR by order allow/reject request. Sr. TAXABLE INCOME RATE OF TAX
PSI/FSI Gain Relating to CA O/T Immovable Property XX XX After giving opportunity of being Where TI does not > Rs.
Political Sub-  Always Non-resident Person (Ii) CG on Disposal of Capital Asset Being Immovable Property 1 0%
heard to the taxpayer 400,000
division of Foreign Consideration received XX XX → CIR to allow only when compelling Where TI > Rs.400,000 but 5% of amount
2
L: Cost of Immovable Property (XX) (XX) need is shown by taxpayer does not exceed Rs. 600,000 exceeding Rs. 400,000
Govt. PSI/FSI Gain Relating to CA being Immovable Property XX XX Where TI > Rs. 600,000 but Rs. 10,000 + 10% of the amount
→ In case of acceptance conditions by 3
does not exceed Rs.1200000 exceeding Rs. 600,000
(Iii) CG on Disposal of Securities CIR may apply
Public International  Always Non-resident Person 4
Where TI > Rs.1,200,000 but Rs. 70,000 + 15% of the amount
Consideration received XX XX → In case of rejection, order to be does not exceed Rs.2400000 exceeding Rs. 1,200,000
Organization L: Cost of Security (XX) (XX) Where TI > Rs. 2,400,000 but Rs. 250,000 + 20% of the amount
passed after recording reasons for 5
PSI/FSI Gain relating to Securities XX XX does not > Rs. 3,000,000 exceeding Rs. 2,400,000
rejection in writing
Income under the Head ‘Capital Gains’ XX Where TI > Rs. 3,000,000 but Rs. 370,000 + 25% of
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COMPUTING DAYS AN INDIVIDUAL IS PRESENT IN PAKISTAN E INCOME FROM OTHER SOURCES
does not > Rs. 4,000,000 the amount > Rs. 3,000,000
Where TI > Rs. 4,000,000 but Rs. 620,000 + 30% of
→ Days Counted as Whole Days Amounts Chargeable XX XX Board may permit class of persons 7
does not > Rs. 6,000,000 the amount > Rs. 4,000,000
- Part of a day an individual is present in Pakistan (day of Less: Deductions Allowed (XX) (XX) having NTY to use STY or vice versa Where TI > Rs. 6,000,000 Rs. 1,220,000 + 35%
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arrival and day of departure) Income under the Head ‘Income from Other Sources’ XX of the amount > Rs. 6,000,000
` F SUM OF ALL HEADS XX
- Public holiday
Add: Exempt Income XX REJECTION SALARIED PERSON
- Day of leave (including sick leave) If income of an individual under the head “salary” exceeds 75% of his
G TOTAL INCOME XX →Review by FBR →FBR’s decision is final taxable income, the individual is termed as ‘Salaried Individual’.
- Day an individual’s activity in Pakistan is interrupted WITHDRAWN
Less: Exempt Income (XX)
because of strike, lock-out or delay in receipt of supplies H NET TOTAL INCOME XX  CIR may withdraw permission to use COMPANY TAX RATES
- Holiday spent in Pakistan before, during or after any Less: Deductible Allowances [Cannot Reduce T/I Before Zero] STY/NTY by order after giving NORMAL COMPANY
activity in Pakistan.  29% for TY 2019 and onwards
→ Zakat § 60 opportunity of being heard. SMALL COMPANY
→ Workers’ Welfare Fund § 60A  Against this order, taxpayer may file  20% for TY 2023 and onwards
→ Day Not Counted → Workers’ Participation Fund § 60B review application to the Board.  21% for TY 2022
→ Deductible allowance for profit on debt § 65C  Board’s decision on review shall be  22% for TY 2021
- Day or part of day an individual is in transit in Pakistan → Deductible allowance for education expenses § 60D (XX) BANKING COMPANY
final.  35% for banking companies from 2007 and onwards
I TAXABLE INCOME XX