Star Business System /Custom and Income Tax
Includes a firm (the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all), a Hindu undivided family, any artificial juridical person and any body of persons formed under a foreign law, but does not include a Company.
Sources said that there were two views on increasing the minimum 3% slab rate, as this could adversely hit industries that are heavily dependent on imported raw materials. There are about 2,400 tariff lines that could be affected if the government decides to increase the rate of minimum slab rate 3% to 4%.
In case of a change in 11% and 16% slab rates another 2,400 tariff lines, mostly comprising semi-finished and finished goods, would be affected, sources added.
Understanding Income Tax
Before Registration and Filing of your Income Tax Return, it is recommended that one should establish basic understanding regarding these processes. Knowledge of basic concepts would not only ensure that the tasks are performed easily but also in the prescribed manner.
Taxable Income means Total Income reduced by donations qualifying straight for deductions and certain deductible allowances.
Total Income is the aggregate of Income chargeable to Tax under each head of Income.
HEAD OF INCOME
Under the Income Tax Ordinance, 2001, all Income are broadly divided into following five heads of Income:
- Income from property;
- Income from business;
- Capital gains; and
- Income from Other Sources
- An individual is Resident for a Tax Year if the individual:
- Is present in Pakistan for a period of, or periods amounting in aggregate to, one hundred and [eighty-three] days or more in the tax year;
- Is present in Pakistan for a period of, or periods amounting in aggregate to, one hundred and twenty days or more in the tax year and, in the four years preceding the tax year, has been in Pakistan for a period of, or periods amounting in aggregate to, three hundred and sixty-five days or more; or
- Is an employee or official of the Federal Government or a Provincial Government posted abroad in the Tax Year.
- An Association of Persons is Resident for a Tax Year if the control and management of its affairs is situated wholly or partly in Pakistan at any time in that year;
- A Company is Resident for a Tax Year if :
- It is incorporated or formed by or under any law in force in Pakistan;
- The control and management of its affairs is situated wholly in Pakistan at any time in the year; or
- It is a Provincial Government or a local Government in Pakistan.
An Association of Persons, a Company and an Individual are Non-Resident for a Tax Year if they are not Resident for that year.