2nd EDITION

CHARGE OF TAX & 4 KEY CONCEPTS

FOR MARCH 2023 ATTEMPT ONLY
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 0%
 denoted by calendar 1
PSI FSI Rs. 600,000
Amounts Chargeable XX XX year in which said Where TI > Rs. 600,000 but 2.5% of the amount exceeding
PERSON WHEN RESIDENT [No deduction Allowed] — — date falls 2 does not exceed Rs. Rs. 600,000
Income under the Head ‘Salary’ XX Special Tax  Period of 12-months 1,200,000
Individual  Presence in Pakistan of 183 days or more in different from NTY Where TI > Rs. 1,200,000 Rs. 15,000 + 12.5% of the
B INCOME FROM PROPERTY Year
aggregate in a TY, or Amounts Chargeable XX XX that person is allowed 3 but does not exceed Rs. amount exceeding Rs.
 Employee/official of Federal/Provincial Less: Deductions Allowed (XX) (XX) by CIR by order, & 2,400,000 1,200,000
Govt. posted abroad  denoted by calendar Where TI > Rs. 2,400,000 Rs. 165,000 + 20% of the
Income under the Head ‘Income from Property’ XX
4 but does not exceed Rs. amount exceeding Rs.
 Being citizen of Pakistan is not present in C INCOME FROM BUSINESS year relevant to NTY
3,600,000 2,400,000
any other country for more than 182 days (i) Business Income Other Than Speculation Business in which the closing
Where TI > Rs. 3,600,000 Rs. 405,000 + 25% of the
during tax year or who is not resident Amount Chargeable XX XX date of the STY falls 5 but does not exceed Rs. amount exceeding Rs.
taxpayer of any other country. Less: Deductions Allowed (XX) (XX) Transitional  Period that comes 6,000,000 3,600,000
PSI/FSI Business Income (other than SB) XX XX Tax Year between end of last Where TI > Rs. 6,000,000 Rs. 1,005,000 + 32.5% of the
AOP  Control & Management of the affairs of
(ii) Speculation Business TY prior to change & 6 but does not exceed Rs. amount exceeding Rs.
AOP is situated wholly or partly in Pakistan Amount Chargeable XX XX date on which 12,000,000 6,000,000
at any time during the year Less: Deductions Allowed (XX) (XX) changed TY Where TI > Rs. 12,000,000 Rs. 2,955,000 + 35% of the
Company  Company incorporated/ formed by or PSI/FSI SB Income XX XX commences 7 amount exceeding Rs.
under Pakistani law Income under the Head ‘Income from Business’ XX 12,000,000
 Control & Management of the affairs of D CAPITAL GAIN PROCEDURE FOR TRANSITION
NON-SALARIED PERSON
company is situated wholly in Pakistan at (i) CG on Disposal of Capital Asset →Person having NTY/STY apply to CIR
any time in the year Consideration received XX XX to allow him to use STY/NTY Sr. TAXABLE INCOME RATE OF TAX
L: Cost of Capital Asset (XX) (XX) → CIR by order allow/reject request. Where TI does not exceed 0%
 Provincial Government 1
Rs. 600,000
PSI/FSI Gain Relating to CA O/T Immovable Property XX XX After giving opportunity of being
 Local Government (ii) CG on Disposal of Securities Where TI > Rs. 600,000 but 5% of the amount exceeding
heard to the taxpayer
Fed. Govt.  Always Resident Person Consideration received XX XX → CIR to allow only when compelling
2 does not exceed Rs. Rs. 600,000
800,000
L: Cost of Security (XX) (XX) need is shown by taxpayer
Foreign Govt.  Always Non-resident Person PSI/FSI Gain relating to Securities XX XX
Where TI > Rs. 800,000 but Rs. 10,000 + 12.5% of the
→ In case of acceptance conditions by 3 does not exceed Rs. amount exceeding Rs.
Income under the Head ‘Capital Gains’ XX CIR mayXX apply
Political Sub-  Always Non-resident Person 1,200,000 800,000
E INCOME FROM OTHER SOURCES → In case of rejection, order to be Where TI > Rs. 1,200,000 Rs. 60,000 + 17.5% of the
division of Foreign Amounts Chargeable XX XX passed after recording reasons for 4 but does not exceed Rs. amount exceeding Rs.
Govt. Less: Deductions Allowed (XX) (XX) rejection in writing 2,400,000 1,200,000
Income under the Head ‘Income from Other Sources’ XX Where TI > Rs. 2,400,000 Rs. 270,000 + 22.5% of the
Public International  Always Non-resident Person F SUM OF ALL HEADS XX 5 but does not exceed Rs. amount exceeding Rs.
COMPUTING DAYS AN INDIVIDUAL IS PRESENT IN PAKISTAN Board may permit class of persons
Organization Add: Exempt Income XX 3,000,000 2,400,000
→ Days Counted as Whole Days G TOTAL INCOME XX having NTY to use STY or vice versa Where TI > Rs. 3,000,000 Rs. 405,000 + 27.5% of the
- Part of a day an individual is present in Pakistan (day of Less: Exempt Income (XX) 6 but does not exceed Rs. amount exceeding Rs.
arrival
` and day of departure) H NET TOTAL INCOME XX 4,000,000 3,000,000
- Public holiday Less: Deductible Allowances [Cannot Reduce T/I Before Zero] REJECTION Where TI > Rs. 4,000,000 Rs. 680,000 + 32.5% of the
→ Zakat paid under Zakat and Ushar Ordinance, 1980 →Review by FBR →FBR’s decision is final 7 but does not exceed Rs. amount exceeding Rs.
- Day of leave (including sick leave) 6,000,000 4,000,000
- Day an individual’s activity in Pakistan is interrupted → Workers’ Welfare Fund WITHDRAWN
→ Workers’ Participation Fund (XX) Where TI > Rs. 6,000,000 Rs. 1,330,000 + 35% of the
because of strike, lock-out or delay in receipt of supplies  CIR may withdraw permission to 8 amount exceeding Rs.
I TAXABLE INCOME XX use STY/NTY by order after giving
- Holiday spent in Pakistan before, during or after any Less: Income subject to Separate Rates (GHS; Salary in Arrears; CG on Immovable
6,000,000
activity in Pakistan. Property & CG on disposal of Securities) (XX)
opportunity of being heard. SALARIED PERSON
Tax on Taxable Income (As per Tax Tables) XX  Against this order, taxpayer may If income of an individual under the head “salary” exceeds 75% of his
→ Day Not Counted Tax on Income subject to Separate Rates (As per special rates) XX file review application to the taxable income, the individual is termed as ‘Salaried Individual’.

- Day or part of day an individual is in transit in Pakistan J TAX LIABILITY XX Board.

COMPANY TAX RATES
Less: Tax Credits (XX)  Board’s decision on review shall COMPANY → 29% (SMALL COMPANY → 20%)
K TAX PAYABLE XX be final. BANKING COMPANY → 39%