24 February 2023

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Final Tax Regime (FTR) – Part II

[vc_empty_space height="20px"] Final Tax Definition The final tax regime (FTR) is a method of taxation where the taxpayer considers the tax deducted as a full and final discharge of their tax liability. [vc_empty_space height="10px"] Income from the final tax regime is not subject to any deductions, allowances, tax credits, or adjustments for losses. [vc_empty_space height="10px"] Final Tax Regime Part I [vc_empty_space height="10px"] Final Tax Regime Part III [vc_empty_space height="10px"] School Supplies [vc_empty_space height="20px"] Final Tax Regime (FTR) - Exports – Section 154, Division IV Part III 1st Schedule [vc_empty_space height="10px"] The tax shall be deducted @1% from export proceeds in respect of direct exporters, indirect exporters, and undertakings located in the Export Processing Zone. [vc_empty_space...

22 February 2023

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Final Tax Regime (FTR) – Part I

Posted by Ali Murtaza

in All Articles, Taxation

[vc_empty_space height="20px"] Final Tax Regime (FTR) Definition [vc_empty_space height="10px"] The final tax regime (FTR) is the method of taxation where tax deducted is considered as a full and final discharge of the tax liability. [vc_empty_space height="10px"] Income from the final tax regime is not reduced by any deductions or allowances nor any tax credit is given or losses are adjusted. [vc_empty_space height="10px"] The income under the final tax regime is not included in the total income. [vc_empty_space height="10px"] Return on income is required to be filed where the only source of income is the Final Tax Regime (FTR) including the filing of wealth statement and statement of foreign income...

12 February 2023

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7E Capital Gain – Deemed Income on Immovable Property

Posted by Ali Murtaza

in All Articles, Taxation

Introduction: Tax under section 7 E and Division VIII C Part I of 1st Schedule @ 20% shall be imposed on the 5% Fair Market Value of the CAPITAL ASSET. It is considered as Deemed Income on immovable property. This income is deemed to have been earned on that CAPITAL ASSET by a resident person on the last day of the TAX YEAR. Effectively, a resident person is liable for tax @ 1% of the Fair Market Value of the CAPITAL ASSET. Fair Market Value – Section 68 The fair market value is the value notified by the Federal Board of Revenue (FBR) if...

09 February 2023

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Income from Property – Income Tax Ordinance 2001

Posted by Ali Murtaza

in All Articles, Taxation

Introduction Rent chargeable on an accrual basis is taxable under the head [mkd_highlight background_color="" color="green" padding="" line_height="" font_size="17"]income from property[/mkd_highlight]. Rent means the sum of money either received or receivable by the owner of any land or building for the use or occupation. (Section 15-16). Chargeable rent consists of the following; Higher of actual rent or fair market rent of land or building. Actual rent in case of self-hiring. Forfeited deposit under a contract for the sale of land or building. 10% of the deposit from the tenant (not applicable in the case of an open plot). Signing amount. Self-Hiring: In self-hiring, the employee...

29 January 2023

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Prudential Regulations Microfinance Banks

Posted by Ali Murtaza

in All Articles, State Bank Regulations

Introduction: In Pakistan, Microfinance Banks (MFBs) play a crucial role in providing financial services to the unbanked and underserved segments of the population. To ensure the stability and sustainability of these institutions, the State Bank of Pakistan (SBP) has implemented a comprehensive set of prudential regulations. These regulations aim to promote the safety and soundness of MFBs while also ensuring that they are able to fulfill their social objectives. In this article, we will provide a summary of the key prudential regulations that Microfinance Banks in Pakistan are required to comply with. Prudential Regulation R-1 Minimum Capital Requirement: MFBs shall maintain a minimum paid up...

29 January 2023

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Prudential Regulation Consumer Financing 1/2

Posted by Ali Murtaza

in All Articles, State Bank Regulations

[vc_empty_space height="20px"] Summary of Prudential Regulation Consumer Financing [vc_empty_space height="10px"] We have compiled summary of prudential regulation for consumer financing. Consumer financing has three main categories which are defined below; [vc_empty_space height="10px"] School Supplies [vc_empty_space height="20px"] Categories of Consumer Financing: [vc_empty_space height="10px"] Credit Cards Cards which allow a customer to make payments on credit. These cards include supplementary cards. Corporate cards are not included in consumer financing. [vc_empty_space height="10px"] Auto Loans This loan includes loan or financing facilities for purchase of personal vehicle. [vc_empty_space height="10px"] Personal Loans This loan includes payment to individuals for payment of goods, services and expenses including running finances. [vc_empty_space height="10px"] Electronics [vc_empty_space height="20px"] Prudential Regulation Consumer R-1: Consumer Financing to Directors, Major Shareholders, Employees. [vc_empty_space height="10px"] Consumer...

25 January 2023

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Compliance for Stock Exchange Broker 2/2

Posted by Ali Murtaza

in All Articles, Company Briefing, Corporate Laws, Stock Exchange

Compliance for Stock Exchange Broker 1/2 Compliance for Stock Exchange Broker Continued Part of Regulatory Compliance applicable for Stock Exchange Broker as follows. Compliance on Leveraged Trading The Broker must ensure that no transaction is executed in the leveraged market unless an appropriate agreement has been executed and; The Broker has; Fully disclosed all the risks involved in the relevant transactions. Explained all the options to the client in respect of various financing facilities. Evaluated credit worthiness of the client. Maintained adequate records of agreement, disclosure of risks and explanation of available options. Compliance on Trading by employees Broker must ensure that it has given...

23 January 2023

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Cross Exchange Rate – Simple Understanding

Posted by Ali Murtaza

in All Articles, Financial Management

Cross Exchange Rate Cross Exchange Rate is an exchange rate between two foreign currencies which is computed with the reference of third currency normally in terms of US $. The base currency US$ always has value of 1$. If for example, we know the exchange rate between Rupees (Rs.) and Pound Sterling (£) and exchange rate of Pound Sterling (£) and US ($), but we do not know the exchange rate between Rupees (Rs.) and US ($), we can calculate this by using cross rate calculations. Example: Using Direct Quote The spot rate of Rupees (Rs.) to and Pound Sterling (£) is Rs.284.76 = 1...

22 January 2023

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Prudential Regulations Consumer 2/2

Posted by Ali Murtaza

in All Articles, State Bank Regulations

Prudential Regulations Consumer [vc_empty_space height="10px"] We have compiled a summary of prudential regulations for consumer financing in this 2nd part. Additionally, separate regulations for credit cards, auto loans, and personal loans are as follows: [vc_empty_space height="20px"] Prudential Regulations Consumer - Credit Card [vc_empty_space height="10px"] Prudential Regulation Consumer O-1 [vc_empty_space height="10px"] The banks should take reasonable steps to satisfy themselves that cardholders have received the card and advise them to keep the card safe and PIN secret. [vc_empty_space height="10px"] Prudential Regulation Consumer O-2 [vc_empty_space height="10px"] After cardholders served a notice that card is lost or stolen, banks shall be held liable for all the transactions held after said notice. [vc_empty_space height="10px"] However banks shall be liable for...

20 May 2021

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Events After Reporting Period (IAS 10)

Posted by Ali Murtaza

in Accounting, All Articles

Events after Reporting Period Events that occurs after the end of reporting period but before the authorization of financial statements are called events after reporting period. These events may or may not in in the favor of an entity. [embed]https://youtu.be/jr_OFMNl1c0[/embed] [embed]https://youtu.be/MgH-JL5v_nU[/embed] Type of Events There are two types of events: 1) Adjusting events after reporting period: There are circumstances that give evidence of condition that existed at the reporting period. 2) Non-adjusting events after reporting period: There are circumstances that give indication of conditions that arose after reporting period. Reporting Periods Reporting periods are quarter end, half year end and financial year end dates. Financial Statement Authorization Date An entity issues...