FBR Pakistan - Law & Rules

Pakistan's Tax Authority - The Federal Board of Revenue 

Definition

"Federal Board of Revenue" means the Federal Board of Revenue (FBR) established under the Federal Board of Revenue Act, 2007.

Who appointed the FBR?

The Federal Government has appointed the Federal Board of Revenue (FBR) by the authority of the Federal Board of Revenue Act, 2007.

Basic function of the FBR

Tax collection shall be the basic function of the FBR.

Status of the FBR

FBR shall be the highest executive authority in Pakistan.

Head of the FBR

Chairman of the FBR shall be the main authority in the FBR who shall be appointed by the Federal Government.

Members of the FBR

FBR shall consist of at least seven members who shall be appointed by the Federal Government.
Powers and Functions of the Federal Board of Revenue (FBR)

The FBR has following powers and performs the following functions in the presence of its powers:

1) Approval of research institutions: [26(2)]

The FBR may approve any institution engaged in scientific research in Pakistan as “Scientific Research Institution” so that such institution may claim its scientific research expenditures as deduction against income from business.

2) Approval of employee training scheme: [27(c)]

The FBR may approve a Pakistani employee training scheme against which deduction is allowed to business.

3) Approval of Leasing Companies and Modaraba: [28(3)]

The FBR may approve any leasing company or Modaraba, where lease rental payment made to such company is allowed as deduction against income from business to that person who makes such payment.

4) Approval of charitable institutions: [61]

The FBR may approve any institution as a charitable institution for the purposes of the Income Tax Ordinance, 2001, especially, for donation purposes.

5) Method of accounting: [32(3)]

The FBR may specify that any class of persons shall record its "Income from Business" on a cash or accrual basis.

6) Apportionment of deductions: [67(2)]

The FBR may make rules u/s 237 for the purposes of apportioning deductions where the expenditure relates to the derivation of more than one head of income.

7) Permission for tax year: [74]

The FBR may permit person or class of persons to use scial tax year instead of normal tax year.

8) Power to demand particular data: [180]

The FBR may demand any data regarding exempted income of any industrial and commercial organization (By delivering data collection and compilation responsibility to any government or private department)

9) Authority of circulars: [206]

The FBR may issue circulars to achieve consistency in the administration of the Ordinance and to provide guidance to taxpayers and officers of the FBR.

10) Empowerment of general administration:

The FBR shall exercise the general administration of the Income Tax Ordinance, 2001.

11) Appointment of income tax authorities: [208]

The FBR may appoint as many income tax authorities as are necessary.

12) Criterion for selection of audit: [177(1)]

The FBR may define criterion to guide the Commissioner of Income Tax that how the CIT select a particular person to conduct audit of its income tax affairs during a particular tax year.

13) Appointment of the auditor: [177(8)]

The FBR may appoint a firm of Chartered Accountants, to conduct an audit of the income tax affairs of any person.

14) Determination of the scope of audit: [179(8)]

The scope of any audit conducted by firm of Chartered Accountants or Cost and Management Accounts shall be determined by the FBR on a case to case basis.

15) Determination of jurisdiction: [209(6)]

Where a question arises as to whether a Commissioner has jurisdiction over a person or not, the question shall be decided by the RCIT or RCITs concerned and, if they are not in agreement, it is determined by the FBR.

16) Authority of approval: [212]

The FBR may authorize the RCIT or the CIT to grant approval on behalf of the FBR.

17) Registration of income tax practitioners: [223(10)]

The FBR may make rules u/s 237 for the registration of income tax practitioners.

18) Power to make rules: [237(1)]

The FBR may, by notification in the Official Gazette, make rules for carrying out the purposes of the Income Tax Ordinance, 2001.
Reading: Income Tax Law Pakistan History

19) Delegation of powers: [209(2)]

The FBR may delegate all or any of its powers and functions to any income tax authority.

20) Unexplained income or assets

The FBR may make rules u/s 237 for the procedure of taxation of any unexplained income or asset of any person discovered by any income tax authority.

21) Supervision of subordinate authorities

The FBR supervises the functions, duties and jurisdiction of its subordinate authorities.

Extent of the Income Tax Ordinance, 2001

The Income Tax Ordinance, 2001 applies to the whole of Pakistan. The definition of word "Pakistan" has been provided in Article 1(2) of the Constitution of Pakistan, 1973. The following territories have been included therein:

1) Pakistan shall be a Federal Republic to be known as the Islamic Republic of Pakistan.

2) The territories of Pakistan shall comprise—

  • a) The territories of Balochistan, the North-West Frontier, the Punjab and Sindh;
  • b) The Islamabad Capital Territory.
  • c) The Federally Administered Tribal Areas; and
  • d) Such States and territories as are or may be included in Pakistan, whether by accession or otherwise.


3) [Majlis-e-Shoora (Parliament)] may by law admit into the Federation new States or areas on such terms and conditions as it thinks fit.


  • a) "Tribal areas" means the areas in Pakistan which; immediately before the commencing day, were Tribal Areas, and includes—
    • i) The Tribal areas of Balochistan and the North-West Frontier Province; and
    • ii) The former States of Amb, Chitral, Dir and Swat;

  • b) "Provincially Administered Tribal Areas" means---
    • i) The district of Chitral, Dir and Swat (which includes Kalam), the [The Tribal Area in Kohistan district], Malakand Protected Area, the Tribal Area adjoining [Mansehra] district and the former State of Amb: and
    • ii) Zhob district, Loralai district (excluding Duki Tehsil), Dalbandin Tehsil of Chgai District and Marri and Bugti Tribal territories of Sibi district; and

  • c) "Federally Adminstered Tribal Areas" includes---
    • i) Tribal Areas adjoining Peshawer district;
    • ii) Tribal Areas adjoining Kohat district;
    • iii) Tribal Areas adjoining Bannu district;
    • iv) Tribal Areas adjoining Dera Ismail Khan distrct;
    • v) Bajaur Agency;
    • vi) Orakzai Agency;
    • vii) Mohamand Agency;
    • viii) Khyber Agency;
    • ix) Kurram Agency;
    • x) North Waziristan Agency; and
    • xi) South waziristan Agency.

Sources / components of Income Tax law:

The following are the constituents of income tax law in Pakistan:

1) The Legislative Law, i.e. The Income Tax Ordinance, 2001.
2) The Procedural Law, i.e. The Income Tax rules, 2002
3) The notifications, circulars etc. issued by the FBR.
4) The case law
5) Finance Acts or Ordinances.


1) Income Tax Ordinance, 2001:


Income Tax Ordinance, 2001 is the basic component of income tax law in Pakistan. All the income tax law revolves around the Income Tax Ordinance, 2001. All matters of taxation regarding computation of taxable income, computation of tax liability, payment of tax, recovery of tax, appeals, refund, penalties and prosecution etc. have been discussed in the Ordinance. The Income Tax Ordinance, 2001 has 240 sections which have been discussed in 13 chapters. Each chapter deals with a particular subject and has been divided into parts. Many parts have been further subdivided into divisions. There are also Seven Schedules of the Income Tax Ordinance, 2001. Each Schedule deals with a particular subject and has been divided into parts. Some parts are further subdivided into divisions. Schedules are also treated as part of the Ordinance.

Reading: Zakat VS Tax

2) Income Tax Rules:


The FBR being the regulatory body and the highest income tax executive authority in Pakistan is empowered to make rules regarding the procedural matters connected with the implementation of the concerned laws like the Income Tax Ordinance, 2001. These rules are made for the guidance of its officials as well as the tax payers. The FBR under the authority of section 237 of the Income Tax Ordinance, 2001 made the Income Tax Rules, 2002. These rules were published on July1, 2002 in Extraordinary Gazette of Pakistan at pages 1819 to 1966. Income tax rules have the same force as the sections in the Income Tax Ordinance and such are implemented in the same manner.

3) Notifications, Instructions, Orders, SROs etc.:

Notifications, instructions, orders, SROs etc. are issued by the FBR u/s 206 of the Income Tax Ordinance, 2001 for the guidance of its officials. Similarly, the Federal Government is also empowered u/s 53 of the Income Tax Ordinance, 2001 to exempt certain types of Income or specific persons from income tax and to prescribe special reduced rates for certain persons or allow a reduction in tax liability by making amendments to the Second Schedule to the Ordinance. Such amendments are usually made by way of statutory Regulatory Orders (SROs) issued by the Federal Government by notification in the official gazette. However, all such amendments during a particular financial year have to be placed before the national Assembly at the end of that year.

4) Income Tax Case Law:

Different disputes arises in respect of rendering the income tax under the taxable limits, assessment of persons, payment and recovery of tax, refunds etc. brought about before the competent authorities for decision in respect of above-mentioned disputes. When such disputes are decided, these decisions are not only help in setting the present disputes but also for future decisions and reference to such decisions is subsequently made in order to get necessary guidance.
Reading: Income Tax Law: Pakistan

5) Finance Acts or Ordinances:

In order to fulfill the budgetary requirements and other social and economic needs of the country, some important amendments are made in the prevailing income tax ordinance every year. Such changes should be approved by the assembly, if Assembly is not in existence, President of Pakistan shall approve these changes. If such annual changes are approved by the National Assembly, are called Finance Act and if these are approved by President, are called Finance Ordinance. Finance Act or Ordinance is presented for the guidance regarding procedure of the computation, assessment and administration etc. for the coming tax year. For example, Finance Act, 2008 was used to compute taxable income, tax liability etc. of tax year 2009.

Exemption as a result of tax treaty

Exemption as a result of tax treaty: 
Any Pakistan-source income for which Pakistan is not permitted to tax under a tax treaty shall be exempt from tax under the Income Tax Ordinance, 2001. 
Salary Income of an Individual Performing Services under an Aid Agreement: 
The salary income of an individual shall be exempt from tax, if the following conditions are satisfied: 

1) Foreign nationality

The individual is not a citizen of Pakistan.
Reading: Pakistan: Income Tax Law

2) Performance of services under an Aid Agreement:

The individual is performing services under an Aid Agreement between the Federal Government and a foreign government or public international organization. 

3) Non-resident or resident only due to service:

The individual is either non-resident or is resident only due to performance of his services under an Aid Agreement.

4) Nationality of aiding country:

The individual is a citizen of that foreign country with which the aid agreement has been entered into.

5) Payment of salary from aided funds

The salary is being paid to the individual by the foreign government or public international organization out of funds or grants released as aid to Pakistan. 

Income of a Contractor, Consultant or Expert:

Any income received by a person engaged as a contractor, consultant, or expert on a project in Pakistan shall be exempt from tax if the following conditions are fulfilled:

1) Foreign nationality:

The person is not a citizen of Pakistan. 
Reading: Pakistan > Income Tax Law History

2) Performance of services under Technical Assistant Agreement:

The person is engaged on a project in Pakistan being undertaken under a bilateral or multilateral technical assistance agreement between the Government of Pakistan and a foreign government or public international organization. 

3) Financing of project from aided funds:

The project is being financed out of the funds available in accordance with the aid agreement. 

4) Non-resident or resident only due to service:

The person is either a non-resident or a resident only due to the performance of services under the agreement. 

5) Receipt of income from aided funds

The person has received income out of the funds of the grant available according to the agreement.

Allowances Attached to President's Honours, Awards etc. [45]

  • i) Any allowance attached to any Honour, Award, or Medal; or 
  • ii) Any monetary award;
granted to a person by the President of Pakistan shall be fully exempt from tax.

Explanation:

The President of Pakistan awarded to player of Pakistan Cricket Team Rs. 100,000 each as a result of winning of test series in India. Such monetary award granted by the President of Pakistan is fully exempt from tax.

Profit (interest) on Debt Received by a Non-resident Person [46]

Any profit (interest) received by a non-resident person on a security issued by a resident person shall be exempt from tax, where:

1) Payer and payee are not associates:

The persons are not associates

Note: If such payment is made by the associate of non-resident person, exemption shall not be granted to a non-resident person

2) Security was widely issued outside Pakistan for raising loan:

The security was widely issued by the resident person outside Pakistan for the purposes of raising a loan outside Pakistan for using such loan in a business carried on by the resident person in Pakistan.
Reading: Partnership Disadvantages

3) Payment of profit outside Pakistan:

The profit on security was paid outside Pakistan to non-resident person.

4) Approval of security from the FBR for exemption:

The security has been approved by the FBR for the purposes of this exemption.

Explanation:

ICI Pakistan Limited issued 6% debentures outside Pakistan to raising loan for its business in Pakistan. Mr. Lewis, a British Nationality Holder and non-resident in Pakistan during the tax year purchased debentures. ICI paid profit (interest) on such debentures to Mr. Lewis from its bank account in London.

It is fully exempt from tax.


Scholarship

Any scholarship granted to a person to meet the cost of the person's education shall be exempt from tax provided that such scholarship has not been paid by an associate of the payee.

Note: HEC scholarship is an important example of such scholarship.

Explanation:

Shezan International Limited decided to provide management course to its employees. They contracted with LUMS to provide such facility and incurred Rs. 500,000 in respect of each employee. Mr. Muhammad Ali is one of the employees who enjoyed free management course facility provided by the employer.

Point to be noted:

This facility is fully exempt from tax for Mr. Muhammad Ali
Support Payment under an Agreement to Live Apart
Any income received by a spouse as support payment under an agreement to live apart shall be exempt from tax.

The Federal and Provincial Government and Local Authority

Income of the following persons shall be exempt from tax:

  • i) The Federal Government; 
  • ii) A Provincial Government; and
  • iii) A local authority in Pakistan.

However, "Income from Business" derived by a Provincial Government or a local authority from a business carried on outside its jurisdictional area shall be taxable.

For example:

Government of the Punjab invested in certain business carried on in the jurisdiction of Government of the Sindh. So, any income derived by the Government of Punjab shall be taxable.

Foreign-Source Income of Short-Term Resident Individuals

Foreign-source income of short-term resident individual shall be exempt from tax provided that:
Reading: eCommerce Importance

1) Resident only due to employment:

The individual is resident only due to his employment in Pakistan.

2) Residential period not exceeding three years:

The individual is resident in Pakistan for a period which is not more than three years.

Note: Following incomes of a short-term resident individual shall not be exempt from tax.

  • i) Income derived by the individual from the business established in Pakistan; or
  • ii) Any foreign source income has been brought into Pakistan or received in Pakistan by the person. 
Reading: Industrial Law

Foreign-Source Income of Returning Expatriate

Foreign-source income of a Pakistani returning back in Pakistan is exempt for two years starting from the year in which he became resident if:

  • i) The income accrues or arises outside Pakistan. 
  • ii) The person was not resident of Pakistan in any of the four years immediately preceding the year in which he became again resident.

For example:

Mr. Ali was settled in England with his family since 2001 as a result of immigration. He returned to Pakistan in March 2008 to reside in Pakistan again as a resident. He earned Rs.500,000 as income from business in England and brought it into Pakistan. His income from business shall be exempt from tax for the tax year 2008 and for the tax year 2009. 

However, salary income of a Pakistani shall be exempt from tax if the individual:

  • a) Left Pakistan during the tax year; 
  • b) Remained abroad during the tax year; and 
  • c) Earned such salary income from outside Pakistan during the tax year.

Exemptions under Part-1 of the Second Schedule:

Part-1 of the Second Schedule provides certain incomes, or classes of incomes, or persons or classes of persons which shall be exempt from tax, subject to the conditions and to the extent specified under each case.

Employee of Agha Khan Development Network Pakistan (AKDNP)

The salary income of a person working as an expert, advisor, consultant or senior management staff in any institution run by AKDNP is exempt from tax if the employee is not citizen of Pakistan.

Salary Income of a Pakistani Seafarer Working on a Foreign Ship:

Salary income derived by a Pakistani seafarer working on a foreign vessel (or on Pakistan flag vessels for 183 days or more during a tax year) is fully exempt from tax; if it fulfills the following conditions:
  • a) Salary income is remitted to Pakistan not later two months of the relevant income year. 
  • b) It is remitted through normal banking channels.
Reading: Kinds of Taxes

Allowance etc. to a Person Working Outside Pakistan:

Any allowance or perquisite paid or allowed by the Government of Pakistan to a Pakistani appointed by the Government of Pakistan to a Pakistani appointed by the Government of Pakistan in any foreign country is exempt from tax and who perform services for Govt. of Pakistan in any foreign country and such allowance or perquisite is also paid or allowed in foreign country.

Explanation

Mr. Ansar is working as Pakistani High Commissioner in USA. The Government of Pakistan has incurred the following expenditures in respect of:

  • Utilities allowance Rs.100, 000 
  • Conveyance allowance Rs.150, 000
  • Rent free accommodation Rs.270, 000
  • Point to be noted:
Although utilities, conveyance and accommodation are taxable but if these are received or allowed to a Pakistani in any foreign country. So, all perquisites received by Mr. Ansar are fully exempt from tax that he is performing services outside Pakistan on behalf of the Govt. of Pakistan.

Pension:

Pension received by the following persons is exempt from tax:
  • 1) Pension received by any citizen of Pakistan. 
  • 2) Pension received by members of Armed Forces of Pakistan or employees of the Federal Government or a Provincial Government. 
  • 3) Commutation of pension received from Government or under any pension scheme approved by the FBR. 
  • 4) Pension received by the families and dependents of public servants or members of the Armed Forces of Pakistan who died during service.
  • 4) Pension received by the families and dependents of "Shaheeds".
  • 5) Pension of former President of Pakistan and his widow under the President Pension Act, 1974.

Notes:

  • i) Exemption in respect of pension shall be withdrawn if the retired person is re- employed by the same employer or an associate of the employer. 
  • ii) Where a person receives more than one pension, then only one pension having higher amount shall be exempt and remaining others shall be taxable.

Leave Encasement:

Any sum representing encashment of leave preparatory to retirement of a member or the Armed Forces of Pakistan or an employee of the Federal Government or a Provincial Government is fully exempt from tax. 

Annuity:

An annuity received from Pakistan Postal Annuity Certificates Scheme is exempt upto Rs. 10,000. Income from all other annuities is fully taxable.

Funds:

Any amount received by any person on account of:
  • i) Provident fund registered under the Provident Fund Act, 1925.
  • ii) Accumulated balance of recognized provident fund.
  • iii) Benevolent Fund. 
  • iv) Approved superannuation fund 
  • v) Workers' Profit Participation Fund (WPPF) 

Accumulated Balance of Provident Fund:

An accumulated amount received by an employee participating in a provident fund is exempt from tax provided that it is a recognized provident fund.

Explanation:

Only the accumulated balance of employer's contribution and interest on such contribution shall be taxable in the year of receipt in case of unrecognized provident fund, if the fund has not been established under the Provident Fund Act, 1925

Reading: Pakistani Partnership Act 1932

 

Commissioner of Income Tax


Defining Commissioner of Income Tax

"Commissioner" means a person appointed as a Commissioner of Income Tax (CIT) u/s 208, and includes a Taxation Officer vested with all or any of the powers, and functions of the Commissioner. 

Who appoints the Commissioner?

Commissioner is appointed by the FBR u/s 208 of the Income Tax Ordinance, 2001.

Basic function of the Commissioner:

Commissioner performs all such functions as are required by any provision of the Income Tax Ordinance, 2001 and as directed by the FBR.

Powers of the Commissioner:

Briefly speaking, the Income Tax Ordinance, 2001 revolves around the Commissioner because lot of powers has been granted under such Ordinance to the Commissioner under the Income Tax Ordinance, 2001.

Who supervises the CIT?

FBR and RCIT under whose jurisdiction, the Commissioner works, supervise the Commissioner of Income Tax.

Jurisdiction of the Commissioner:

  • If CIT is appointed for a specific area, the CIT shall perform his functions within his jurisdiction
  • If CIT is not appointed for a specific area, the CIT shall perform his functions in respect of such persons or classes of persons or such area as the FBR may direct him.
Note: Income Tax Ordinance, 2001 also permits the delegation of work. If some work of Commissioner is delegated to a Taxation Officer such Taxation Officer may enjoy all powers of the Commissioner. 


Powers and Functions of the Commissioner of Income Tax:

1) Change in method of accounting [32(4)]

The Commissioner may allow a change in method of accounting, if the CIT is satisfied that the change is necessary to clearly reflect the person's income chargeable to tax under the head "Income from Business".

2) Change in stock valuation method [35(6)]

The Commissioner may allow a person to change its stock valuation method.

3) Allow-ability of Special Tax year [74(3)]

The Commissioner may allow a person to use special tax year, only if the person has shown a compelling need to use special tax year.

4) Allow-ability of Normal Tax Year [74(4)]

The Commissioner may allow a person to use normal tax year instead of special tax year, only if the person has shown a compelling need to use normal tax year.

5) Imposition of conditions regarding tax year [74(5)]

The Commissioner may impose certain conditions while permitting a person to use a special tax year or normal tax year.

6) Withdrawal of permission to use a specific tax year:

The Commissioner may withdraw the permission granted to a person in respect of using the specific tax year (special tax year or normal tax year), after providing the opportunity of being heard.

7) Transactions between associates [108(1)]

The Commissioner may, in respect of any transaction between associates, distribute apportionate or allocate income, deduction or tax credits.

8) Unexplained income or assets [111]

The Commissioner may charge to tax the value of any unexplained income or asset and determine the value if it has been declared less than the fair market value (FMV).

9) Issuance of notice for filing of return [114(3) and (4)]

The Commissioner may issue a notice to a person for filing a return.

10) Issuance of notice to furnish Wealth Statement [116(1)]

The Commissioner may issue a notice to any person to furnish a wealth statement.

11) Extension of time [119]

The Commissioner may grant the applicant an extension of time for furnishing the return, certificate, or statement etc.

12) Best judgment assessment [121]

If the tax payer has not furnished required return or any other document, the Commissioner may make best judgment assessment order.

13) Amended assessment order [122]

The Commissioner may amend an original assessment order by making necessary alterations or additions.

14) Recovery of tax from defaulting tax payer [138]

The Commissioner may take all necessary and appropriate actions for recovery of tax from a defaulting taxpayer

15) Recovery of tax from other person on behalf of taxpayer [140]

The Commissioner may recover the tax from a person who holds money on behalf of the defaulting taxpayer

16) Power to enter and search premises [175]

The Commissioner may enter in any business premises of the taxpayer within his jurisdiction to perform any task which is deemed fit for the Income Tax Ordinance, 2001.

17) Power to select a person for audit [177]

The Commissioner may select a person for audit of his income tax affairs.

18) Imposition of penalties [Part-X of Chapter-X)

The Commissioner may impose penalties for different defaults discussed under Part-X of Chapter-X of the Income Tax Ordinance, 2001.

19) Imposition of additional tax [205]

The Commissioner may impose additional tax if the tax payer fails to pay the tax by due date

20) Appointment of subordinates [208(2)]

The Commissioner may appoint of his any subordinate authority by the approval of the FBR.

21) Delegation of powers:

The Commissioner may delegate to any Taxation Officer all or any of its powers or functions, other than the powers of delegation.

22) Appointment of expert [222]

The Commissioner may appoint any expert for the purposes of audit or valuation etc.

23) Recognition / approval of funds:

The Commissioner may recognize the provident fund, superannuation fund and gratuity fund etc. under the Income Tax Ordinance, 2001.

24) Supervision of subordinate authorities:

The CIT supervises the functions, duties and jurisdiction of its subordinate authorities.

Tax year 2010


i) interest free loan is given to employees



While employees by employer interest free loan, the bench mark for calculating rates is provided to be eligible. For tax year 2010 standard rate is 12%.

  • Example:
  1. From your employer during the year, Mr. Ahsan and quantity, since 2010 has been received
  2. 200.000 Basic pay
  3. Interest free loans provided by employers 300,000
  4. 50,000 merit pay
  5. Essential: his total income for the tax year, Compute 2010.
  • Solutions
  1. 200.000 Basic pay
  2. Interest on interest-free loans (300,000 @ 12%) 36,000
  3. 50,000 merit pay
  4. Total income 286.000

ii) interest rate is lower than the bench mark rate

Where the bench mark rate, the bench mark rate and real interest rate gap between real interest rates will be taxable.

  • Example:
    1. During 2010, Mr. Ahsan and his employer the amount received from the following:
    2. 200.000 Basic pay
    3. 75,000 special allowance
    4. Loan @ 6% from employer 300.000
    5. Required: for tax year 2010 Compute his total income.
  • Solutions:
    1. 200.000 Basic pay
    2. Special allowance (totally free) None
    3. Interest on loans (12% -6% = 6%) 300,000 @ 6%
    4. (Bench mark rate and the difference between the actual rate) 18,000
    5. Total income 218.000

iii) Interest rate bench mark rate is equal to:


While credit is given to employees by employer @ 12%. In other words, the interest rate is equal to the bench mark rate, nothing in an employee's total income will be included as interest on debt.

  • Example:
    1. Mr. Ahsan tax year 2009 amount received from your employer during the following:
    2. 200.000 Basic pay
    3. Loan from the employer 12% @ 300.000
    4. Capacity 90,000 honorarium
    5. Required: for tax year 2010 Compute his total income.
  • Solutions
    • 200.000 Basic pay
    • @ 12% of employers had no interest on debt
    • Capacity 90,000 honorarium
    • Total income 290.000

iv) Interest rate is higher than the bench mark rate:


Such debt is no cure.
  • Example:
    • During 2010, Mr. Ahsan and his employer the amount received from the following:
    • 200.000 Basic pay
    • @ 13% interest on loans received from employers 300.000
    • 100,000 overseas allowance
    • Required: for tax year 2010 Compute his total income.
  • Solutions
    • 200.000 Basic pay
    • @ 13% of employers received no interest on debt
    • 100,000 overseas allowance
    • Total income 300.000

No comments:

We value your words. Don't spam here.

Powered by Blogger.