Taxation

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Advance Tax – Part II

Advance Tax Part II

[vc_empty_space height="20px"] Introduction [vc_empty_space height="10px"] Advance tax is a type of tax that individuals, businesses, and corporations must pay.  Certain categories of taxpayers are required to pay advance tax, and non-compliance can result in penalties and legal consequences." [vc_empty_space height="10px"] This is Part II of our article, where we will talk more about advance tax on new motor vehicle registration, transfer of motor vehicles, tax on telephone, internet, and mobile users, as well as tax on retailers and distributors. [vc_empty_space height="10px"] School Supplies [vc_empty_space height="10px"] Advance Tax - Part I [vc_empty_space height="20px"] Advance Tax on Registration of Motor Vehicles – Sec 231B, Division VII Part IV 1st Schedule [vc_empty_space height="10px"] First Registration [vc_empty_space height="10px"] Based...

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Advance Tax – Part I

Advance Tax - Part I

[vc_empty_space height="20px"] Introduction [vc_empty_space height="10px"] Advance tax is a form of taxation that requires individuals, businesses, and corporations to pay a portion of their estimated tax liability in advance. [vc_empty_space height="10px"] It is mandatory for certain categories of taxpayers to pay advance tax, and failure to comply with the requirements can result in penalties and legal consequences. [vc_empty_space height="10px"] School Supplies [vc_empty_space height="10px"] In this article, we will explore the concept of quarterly advance tax on individuals, companies / AOPs in Pakistan, advance tax on capital gain, on registered sales tax persons. [vc_empty_space height="20px"] Advance Tax Payment on a quarterly basis – Sec 147 [vc_empty_space height="10px"] Individual [vc_empty_space height="10px"] An individual with an assessed income...

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Withholding Tax – Part II

Withholding Tax-II

[vc_empty_space height="20px"] Introduction [vc_empty_space height="10px"] Withholding Tax is the tax under which tax deducted or collected at source is treated as a minimum tax for such transaction. [vc_empty_space height="10px"] This tax becomes final tax when withholding tax is higher than normal tax, otherwise, adjustable in normal tax. [vc_empty_space height="20px"] Withholding Tax on Supply of goods by a resident person – Section 153, Division III Part III 1st Schedule [vc_empty_space height="10px"] Withholding tax on the supply of goods is applicable as follows: [vc_empty_space height="10px"] Applicable Section Nature Filer Non-Filer Other Goods u/s 153(1)(a)/5 Association of Persons (AOP) 4.50% 9.00% Other Goods u/s 153(1)(a)/5 Individuals 4.50% 9.00% Other Goods u/s 153(1)(a)/4 Company 4.00% 8.00% Fast Moving Goods u/s 153(1)(a)/28 Association of Persons (AOP) 0.25% 0.50% Fast Moving Goods u/s 153(1)(a)/28 Individuals 0.25% 0.50% Fast Moving Goods u/s...

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Withholding Tax – Part I

Withholding Tax

[vc_empty_space height="20px"] Introduction [vc_empty_space height="10px"] Withholding is the tax under which tax deducted or collected at source is treated as a minimum tax for such transaction. [vc_empty_space height="10px"] This tax becomes final tax when withholding tax is higher than normal tax, otherwise, adjustable in normal tax. [vc_empty_space height="20px"] Withholding Tax deducted on services – Section 153 Division III (2) Part III 1st Schedule [vc_empty_space height="10px"] Prescribed Services – Section 153(1) b: [vc_empty_space height="10px"] The tax on gross amount including sales tax shall be deducted according to the below table for the following prescribed services; [vc_empty_space height="10px"] List of Prescribed Services Transport Services Freight and forwarding services Air Cargo Services Courier Services Manpower Outsourcing ...

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Final Tax Regime (FTR) – Part III

Final Tax Regime - Part III

[vc_empty_space height="20px"] Final Tax 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"] School Supplies [vc_empty_space height="20px"] Final Tax Regime Part I [vc_empty_space height="10px"] Final Tax Regime Part II [vc_empty_space height="20px"] Small and Medium Size Enterprise (SME)– Section 2(59A), 100E and 14th schedule of the Income Tax Ordinance, 2001. [vc_empty_space height="10px"] SME Definition [vc_empty_space height="10px"] A Small and Medium Size Enterprise (SME) means a person who is engaged in manufacturing...

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Final Tax Regime (FTR) – Part II

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...

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Final Tax Regime (FTR) – Part I

Final Tax Regime

[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...

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7E Capital Gain – Deemed Income on Immovable Property

Capital Gain - Deemed Income

  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...

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Income from Property – Income Tax Ordinance 2001

Income from property

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...

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