income tax procedure for partnership

Income Tax Procedure Of Firm/ Partnership Policy, Planning & Strategy

1

Regulatory Procedures

Income Tax Procedure For A Firm/ Partnership

Prepared By: Policy Planning & Strategy (Revised on July 20, 2002)

Small and Medium Enterprise Development Authority Government of Pakistan

www.smeda.org.pk

HEAD OFFICE Waheed Trade Complex, 1st Floor , 36-Commercial Zone, Phase III, Sector XX, Khayaban-e-Iqbal, DHA Lahore

Tel: (042) 111-111-456, Fax: (042) 5896619, 5899756 [email protected]

REGIONAL OFFICE PUNJAB

REGIONAL OFFICE SINDH

REGIONAL OFFICE NWFP

REGIONAL OFFICE BALOCHISTAN

Waheed Trade Complex, 1st Floor, 36-Commercial Zone,

Phase III, Sector XX, Khayaban-e-Iqbal, DHA Lahore.

Tel: (042) 111-111-456 Fax: (042) 5896619, 5899756

[email protected]

5TH Floor, Bahria Complex II, M.T. Khan Road,

Karachi. Tel: (021) 111-111-456

Fax: (021) 5610572 [email protected]

Ground Floor State Life Building

The Mall, Peshawar. Tel: (091) 9213046-47


Bungalow No. 15-A Chaman Housing Scheme

Airport Road, Quetta. Tel: (081) 831623, 831702


TABLE OF CONTENTS

1. Introduction of SMEDA 02

2. Role of Policy Planning and Strategy Group 02

3. Flow Chart 03

4. Partnership Firms 04

5. National Tax Number 04

6. Maintenance of Book Accounts 05

7. Preparation of Accounts 06

8. Computation of Income Tax 06

9. Filing of Annual Income Tax Return 12

10. Assessment 13

11. Annexure I 14

12. Annexure II 15

INTRODUCTION OF SMEDA The Small and Medium Enterprise Development Authority (SMEDA) was established with the objective to provide fresh impetus to the economy through the launch of an aggressive SME development strategy. Since its inception in October 1998, SMEDA had adopted a sectoral SME development approach. A few priority sectors were selected on the criterion of SME presence. In depth research was conducted and comprehensive development plans were formulated after identification of impediments and retardants. The all-encompassing sectoral development strategy involved overhauling of the regulatory environment by taking into consideration other important aspects including finance, marketing, technology and human resource development. SMEDA has so far successfully formulated strategies for sectors including fruits and vegetables, marble and granite, gems and jewellery, marine fisheries, leather and footwear, textiles, surgical instruments, transport and dairy. Whereas the task of SME development at a broader scale still requires more coverage and enhanced reach in terms of SMEDA’s areas of operation. Along with the sectoral focus a broad spectrum of services are now offered to the SMEs by SMEDA, which are driven by factors like enhanced interaction amongst the stakeholders, need based sectoral research, over the counter support systems, exclusive business development facilities, training and development for SMEs and information dissemination through wide range of publications.

ROLE OF POLICY PLANNING AND STRATEGY GROUP The Policy, Planning and Strategy Group (PPSG) of SMEDA plays a key role in providing an overall policy direction to SMEDA, under which SMEDA provides support to SMEs. The PPSG provides guidance based on field realities pertaining to SMEs in Pakistan and other parts of the world. PPSG believes that information dissemination among the SMEs on the existing regulatory environment is of paramount importance and it can play a pivotal role in their sustainable development. In order to facilitate SMEs at the Micro Level PPSG has developed user-friendly systems, which provides them detailed description of the Laws and Regulations including the process and steps required for compliance. As far as this document is concerned, it provides information pertaining to Income Tax registration computation and filing of returns. The document can be used by partnership concerns interested in enhancing their understanding about the regulatory procedures and documentation required to comply with Income Tax regulation in Pakistan. For convenience of the readers a process flow chart and sample of various forms are also included.

Assessment by Tax department

Filing of Income Tax returns of Firm/Partnership & Partners

• Form of income tax returns IT 11A

• 4 Tax payment Challans IT 31 (A,B,C,D)

FLOW CHART1

Registration of a firm/partnership with Income Tax Department

Application for NTN

File of application on IT-A for firm with CBR, Islamabad

Allocation of NTN number by CBR through post

Maintenance of books of accounts for a financial/income year

Preparation of accounts for a financial year

` Computation of income tax

1 The definitions of the terms are given on the next page

• Calculation of total taxable income

• Tax deductions • Calculation of tax at

applicable slab rate • Application of surcharge • Deduction of tax credit • Deduction of advance taxes • Total tax payable with

return (Total income – deductions) * slab rate + Surcharge – tax credit- Advance taxes = final tax payable.

• Complete IT-A • Attested NIC

copies of partners/directors

• Registration certificate

• Profit and Loss Account

• Balance Sheet

• Books • Records

DEFINITIONS • ASSESSEE: Every firm/partnership or association of persons which is liable to pay

income tax or liable to file returns of total income under the Income Tax Ordinance, 1979.

• REGISTERED FIRM: Every firm consisting of at least 2 members, registered with Income Tax Department as a partnership under the Partnership Act of 1996, is called a registered firm.

• UN-REGISTERED FIRM: A partnership firm consisting of at least 2 members, and not registered as a partnership with Income Tax authorities..

• NIC: National Identity Card. • NTN: National Tax Number • AOP: Association of persons ( same as firm) • HUF: Hindu undivided families • FINANCIAL YEAR: From June to July next year. Filing of returns due on

September 30. PARTNERSHIP/FIRM With respect to the Income Tax ordinance 1979, there are two kinds of partnerships2 • Unregistered firm • Registered firm The registered firm gets the benefit of lower rates of super tax than those, which are applicable to an unregistered firm. Thus, a firm is a registered firm if it complies it the following requirements: • If the firm has prepared Partnership Deed before the end of income year • The Partnership deed specifies the shares of all the partners (Profit /Loss sharing

ratio has to be mentioned). • The firm has been registered under the Partnership Act of 1932 (IX of 1932), or an

application for registration under the above act has been made. An un-registered firm is a firm, which does not fulfils the above mentioned requirements. NATIONAL TAX NUMBER (NTN) Every firm is assigned a national tax number. The reason for having a NTN by the firm is that it cannot file for returns if it does not have the NTN. And so those firms who do not have the NTN have to file an application for it. This application form can be obtained from CBR office.

2 PARTNERSHIP: Partnership is defined under the Partnership Act, 1932, as “relationship between persons who have agreed to share the profits of a business managed by all or any one of them acting for all”. Association of persons (AOP) is also a form of partnership.

The documentation required to obtain the NTN for Firms and association of persons are: • Complete application form for the issuance of NTN. • Photo copies of NICs of all the partners. • Incorporation or the registration certificate. • Application for NTN by individual partners in case they do not have NTN. Class-1 gazetted officer or an officer of the state owned bank should attest all documents. MAINTAINANCE OF BOOK OF ACCOUNTS It is most important for a partnership to maintain its books of accounts and accounting records as mentioned in Section 32A. For this purpose, the following accounting records must be kept: Books • Vouchers (Receipt and payment vouchers, journal vouchers) • General Ledger (Individual accounts) • Cash Book • Bank Book • Computerised accounting software ( if applicable) Records • Records of sales ( Sales invoices) • Records of purchases ( Purchase orders & bills of vendors) • Records of stocks/ inventory (in case of manufacturing concern, production

records) • Records of utility bills • Supporting documents for expenses (Cash memos of expenses etc) The preparation, maintenance and possession of these accounts are important for a firm/partnership to calculate its annual profit/income. The tax authorities assess the total income of a firm on the basis of particulars given in the tax return. The particulars furnished in the tax return are taken from the books of accounts. In case there is any difference in the tax returns and the books of accounts, the firm will have to face penalties or the income tax authorities may take ex-party decision/ assessment, which might prove more costly to an firm/partnership. There are certain kind of penalties which can be imposed on an firm/partnership upon non- compliance of the income tax regulations, which are defined from section 108 to section 1163.

3 Section 108: If the firm/partnership does not file income tax returns, the firm/partnership can be fined a minimum of Rs. 500 or amount equal to one tenth of one percent of the tax payable for each day of default and a maximum of 25% of his tax liability. Section 109: If the firm/partnership does not maintain his book of accounts, the firm/partnership can be fined a minimum of Rs. 2,000 or a maximum of 15% of his tax liability.

PREPARATION OF ACCOUNTS The firm/partnership is required to prepare accounts once at the end of every financial year in order to arrive at the profit/income, which it has earned. This profit/income is required for computing the income tax liability/ refund, which will be mentioned in the annual income tax returns. Following set of accounts are required to be prepared by the firm/partnership: • Profit and Loss Account • Balance Sheet There may be difference between the tax calculated by a firm and the tax calculated by the tax department. This difference may be due to change in depreciation4 rates, lease rentals or any other differences as stated in the Income Tax Ordinance 1979, 3rd Schedule. COMPUTATION OF INCOME TAX It is required by the income tax ordinance 1979 under section 55 that every firm/ partnership whose total income exceeds Rs 30,000 (in case of registered firm) and Rs. 50,000 (in case of unregistered firm) will furnish a return of its total income. If the returns of total income on IT 11 A form (sample form in Annexure II) is furnished by Registered Post, it should be accompanied by acknowledgement due. If returns on IT 11A form is delivered by hand, then acknowledgement will be received at the spot. Computation of Total Taxable Income: In order to compute the income of a firm/ partnership for the year in which it is assessable, following steps will be taken under the following sections of the income tax ordinance 1979: 1. Section 22 (S22): Calculation of income from business or profession (subject to

deductions, which are allowable under section 235). This income is derived from Profit & Loss Account of the Firm.

2. Section 30 (S30): Income from other sources (subject to deductions such as:

collection and realization charges, repair and maintenance charges, insurance charges, depreciation allowances as per 3rd schedule, interest or borrowed capital and any other expenditure incurred for the earning of such income. which are

4 Depreciation: It is a measure of the wearing out, consumption or other losses in the value of the “Fixed Asset” arising from its usage, passage of the time or obsolescence.

5 Deductions Allowed under Section 23: The deductions that could be made under the section 23 are: rent, rate, taxes repairs, and insurance for business premises; repair and insurance of machinery, plant and furniture; where premises, machinery, furniture are partly used; interest on borrowed capital; bonus or commission paid to employee; e.t.c.

allowable under section 31). This section refers to such income, which an company earns from any other source. These sources could be: dividends; interest, royalties and fee for technical services; ground rent; income from renting out machinery, plant or furniture belonging to the assessee, e.t.c. ).

3. Section 17 (S17) (if applicable): Income as interest earned on securities6 (subject

to deductions, which are allowable under section 187). This income is earned by a company in the form of interest earned on debentures, bank accounts, any securities of the Federal Government or a Provincial Government receivable by the assessee in any income year, etc.

4. Sections 19 (S19) (if applicable): Income from house property (subject to

deductions, which are allowable under section 208). If a firm earns a rent income then it has to show it in the annual tax returns.

5. Section 27 (S27) (if applicable): Capital Gains9. It is mandatory for a firm/ partnership to show all incomes mentioned above in its annual income tax returns. In order to calculate the total taxable income, all the above mentioned sections will be summed up as below:

S22 + S 30 + (S17 +S19+S27) If Applicable = Total taxable Income

The exemption on capital gains is extended to another three years. The tax exemption on income from FEBCs, TFCs, income from national saving schemes on investments in excess of Rs. 300,000 and income from number of special purpose relief funds has been eliminated. The individual will have to pay a tax @10% on the TFCs. The tax withheld form profit or interest on bonds, certificates, debentures, securities, etc. is being converted into adjustable tax w.e.f. assessment year 2002-2003. These instruments will be taxable @10%.

6 Securities: The word security is not defined in the ordinance. The Oxford English Dictionary defines the word “security” as “a document held by creditor as a guarantee of his right to payment”. 7 Deductions allowed under section 18: Includes deductions like interest on capital borrowed for investment in securities, e.t.c. 8 Deduction Permissible under Section 20: The deductions permissible under section 20 are; repairs, Insurance premium, any local rate, charges or cess, ground rent, interest on borrowed capital, e.t.c. for the property purposes. 9 Capital Gains: Profit and gain arising from the ‘transfer’ of ‘capital Assets’. Capital Asset means property of any kind held by the assessee. These assets include: any stock-in-trade, consumable stores or raw materials held for the purpose of business, movable property, e.t.c. Transfer in relation to capital asset includes: sale, settlement, exchange (where assessee does not bring cash but exchange it) of an asset, e.t.c.

TAXES ON EXPORTERS For exporters tax is applicable according to Eighth Schedule under section 80C10. There are three different rates of taxes for exporters, depending upon the description of the exports: 1. Part 1: 0.75% of the realisation value11 of exports. 2. Part 2: 1% of the realisation value of exports. 3. Part 3: 1.25% of the realisation value of exports. Exporters who are also selling their products in the local market, and the percentage of their local sales with respect to total production is more than 20%, are required to file their income tax returns on the basis of the above mentioned procedure. Under Section 143B of Income Tax Ordinance 1979, the government has given exemption on filing of income tax returns to those manufacturing units, which are exporting 80% or more of their total production. The tax deducted at the time of realisation of foreign exchange proceed is accepted as the final payment of income tax. Following is a schedule outlining rates of tax at export proceeds and their applicability on various industrial sectors: Schedule 8 Percentage of Tax Description of Industrial Sectors Part –I 0.75% Leather and textile made ups, Engineering goods,

sports goods, etc. Part –II 1% Refined / treated salt, Ground batteries, Granite

blocks and slabs, etc. Part –III 1.25% Raw cotton, Rice, Lamb skin, etc. Deductions from total taxable income: After calculating the total income, various deductions have to be made in order to arrive at the total taxable income. The detail of which along with examples is given below: • Section 18 (S18) : Includes deductions such as interest payments on loans. • Section 20 (S20) : Includes deductions such as house repairs, insurance of

property e.t.c. • Section 23 (S23) : Includes deductions such as rent for premises of business,

local taxes e.t.c

10 Under section 80C: A business that is exporting 100% of its production is not required to furnish its annual income tax returns. The tax deducted at the time of realisation of foreign exchange proceed is accepted as the final payment of income tax. 11 Realisation Value: The amount of cash or cash equivalents that could currently be obtained by selling an asset in an orderly disposal.

• Section 31 (S31) : Includes deductions such as commissions for realisation of dividends e.t.c.

• Section 34 (S34) : Businesses losses.12 • Section 37 (S37) : Capital Losses.13 • Exemptions from total income under Schedule II After deducting the above-mentioned deductions, the firm/ partnership will arrive at the total taxable income. Tax liability will be calculated on the basis of the following slabs:

Slab applicable to unregistered firm/AOP: Total Income Rates of Income Tax Up to Rs. 60,000 Nil Rs. 60,001 to Rs. 150,000 7.5% of the amount exceeding Rs. 60,000 Rs. 150,001 to Rs. 300,000 Rs. 6,750 + 12.5% of the amount exceeding

Rs. 150,000 Rs. 300,001 to Rs. 400,000 Rs. 25,500 + 20% of the amount exceeding


Rs. 400,000 Where the total income exceeds RS. 700,000

Rs. 120,500 + 35% of the amount exceeding Rs. 700,000

Slab applicable to Registered firms:

Super Tax Rates for Registered Firms Total Income Rates of Super Tax Up to Rs. 30,000 Nil Rs. 30,001 to Rs. 80,000 5% of the amount exceeding Rs. 30,000 Rs. 80,001 to Rs. 130,000 Rs. 2,500 + 10% of the amount exceeding Rs. 80,000. Rs. 130,001 to Rs. 180,000 Rs. 7,500 + 15% of the amount exceeding Rs. 130,000. Exceeding Rs. 180,000 Rs. 15,000 + 25% of the amount exceeding Rs. 180,000. Application of surcharge and tax credit: All the above stated incomes have to be shown and added up in the annual income tax return, in order to compute the income-tax liability/ refund. The total income figure will receive the following treatment, depending upon its value:

12 Business Losses: The business losses can arise due to loss in the interest on securities, income from house property, income form non-speculative business, income from other sources and income from speculative business. 13 Capital Loss: Any loss arising out of the transfer of a capital asset is termed as capital loss.

• If the total taxable income of an unregistered firm does not exceed Rs. 100,000 an amount of surcharge of Rs. 300 will be added in the income tax liability.

• If the total income of an unregistered firm exceeds Rs. 100,000, an amount of surcharge at the rate of 10% on income tax liability will be added.

• In the case of a registered firm, surcharge is applicable at the rate of 5% of the tax payable (applicable in case of profit).

• In the case of an un-registered firm, tax credit of Rs. 2,500 has to be deducted. Deductions of various Advance Taxes from Tax Liability: After computing the total taxable income of a firm (registered or unregistered), the various advance taxes, which were paid in advance to the government, during the year, will be deducted from the income tax liability. Examples of more frequently deductible advance taxes as per various sections of the income tax ordinance are given below: • Advance tax 14paid in the form of utility bills.

Advance tax can only be claimed if the utility bills are in the name of the firm/partnership. If the business is in rented premises, then a copy of the agreement with the owner of the premises has to be furnished to the Income Tax authorities in order to deduct advanced tax on utility bills. • Section 50: Includes deductions and exemptions allowed under Section 50 by the

government. e.g. under Section 50 (4), Advance Tax deduction from payments, by other businesses at the rate of 3.5% for supply of goods and 5% for provision of services by the firm/partnership. A firm/partnership can also obtain tax exemption certificate from the related income tax department in order to avoid the deduction of tax under Section 50 on its payments.

• Section 50(5): Includes advance tax payable by importers, which has to be

calculated from the total value of imports using the formula mentioned below:

(Value of imports + Custom Tax + Sales Tax) x 6%15

• Advance tax deducted by a financial institution on export proceeds (if applicable). Formula for calculation of final tax liability After completing the above mentioned procedures, the total income tax liability of a firm can be summarized as follows: 14 Advance Tax: The advance payment of tax is a scheme in which the assessee is is required to pay tax in a particular financial year, preceding the assessment year, on the basis of his estimated income or the latest assessed income. 15 Under section 80 C, the above-mentioned 6% tax is non-refundable for commercial importers. In case the imports are used in a value addition process by a manufacturing concern, the 6% tax is deductible.

Step 1: Total Taxable Income = S22 + S30 + (S17 + S19 + S27) If Applicable Step 2: Deductions = S18+S20+S23+S31+S34 +S37+Schedule II (Income Tax Ordinance 1979) So the total taxable income can be calculated from the following formula: Total Taxable Income = S22 + S30 + (S17 + S19 + S27) If Applicable –

(S18+S20+S23+S31+S34 +S37+Schedule II) Step 3: Calculation of tax liability, on the basis of tax rates given below: Slab applicable to unregistered firm/AOP:

Total Income Rates of Income Tax Up to Rs. 60,000 Nil Rs. 60,001 to Rs. 150,000 7.5% of the amount exceeding Rs. 60,000 Rs. 150,001 to Rs. 300,000 Rs. 6,750 + 12.5% of the amount exceeding



Rs. 400,000 Where the total income exceeds RS. 700,000

Rs. 120,500 + 35% of the amount exceeding Rs. 700,000

Slab applicable to Registered firms:

Total Income Rates of Super Tax Up to Rs. 30,000 Nil Rs. 30,001 to Rs. 80,000 5% of the amount exceeding Rs. 30,000 Rs. 80,001 to Rs. 130,000 Rs. 2,500 + 10% of the amount exceeding Rs.

80,000. Rs. 130,001 to Rs. 180,000 Rs. 7,500 + 15% of the amount exceeding Rs.

130,000. Exceeding Rs. 180,000 Rs. 15,000 + 25% of the amount exceeding Rs.

180,000. Step 4: • Addition of surcharge • Deduction of Tax credit of Rs 2500 in case of un-registered firms only

Step 5: • Adjustment of Tax deducted under Section 50 and Section 80C. After completing the first three steps, deduct amounts mentioned in step five Step 6: After completing the above mentioned steps, the firm/ partnership will arrive at either of the two cases: • Payment of tax, calculated on profits earned • Tax to be paid under section 80D16, in case of accounting loss. So the final formula for calculation of income tax liability is: Total Tax Liability = S22 + S30 + (S17 + S19 + S27 ) If Applicable –

(S18+S20+S23+S31+ S34 +S37+Schedule II) + surcharge - tax credit – S50 – S80C (if applicable) After the above-mentioned procedure the firm/ partnership will arrive at the income tax liability/ refund. In case of liability, the amount of tax liability has to be deposited in the government treasury through State Bank of Pakistan or designated branches of National Bank of Pakistan on Tax payment Challan IT 31 (A,B,C,D) of which 4 copies are to be prepared. The distribution of the copies is as under: • Two copies of the tax payment challan be kept by the respective bank. • One copy to be attached with the Annual Income Tax return IT-11 A. • The firm, for its official use will retain the fourth copy.

In case of refund, a firm can contact the Income Tax department to get the refund of tax.17 FILING OF ANNUAL INCOME TAX RETURN After preparation and completion of annual income-tax return or statement under section 143 B, it will be deposited along with a copy of tax payment challan, with the 16 Under section 80D, an firm/ partnership has to pay turnover tax at the rate of 0.5 % of its annual turnover (annual sales), in case of accounting loss. The firm/ partnership either pays tax calculated on the net profit at the rate mentioned in the slab or tax calculated under section 80 D, whichever is higher. 17 Under section 59C, the small and medium entrepreneurs can avail the facility of fixed tax, which is announced annually by the government. This will save the entrepreneurs from the hassle of filing of income tax return and other assessment procedure.

respective income tax department on or before of Sept 30th of the respective year. A detail of income tax offices in major cities is given in Annexure I. Acknowledgement on prescribed form will be taken from the income tax authority at the time of deposit of the said documents. To file the income tax returns, a firm needs to furnish the following documents to the income tax authorities: 1. Form of annual income-tax return for a Firm (IT-11 A). 2. Tax payment challans (IT 31 A, B, C, D). 3. Photocopies of utility bills in case of adjustment of advanced tax. 4. Photocopies of tax payment challans in case of adjustment of advanced taxes

under Section 50 and 80C. ASSESSMENT After completing the above-mentioned procedure, the firm/partnership will wait for the assessment to be made by the income tax authorities. The assessing officer of the income-tax department, issues assessment orders, after the finalisation of its assessment and a copy of assessment order is forwarded to the firm/partnership. In case of disagreement by the tax department, with the tax returns, filed by the firm/partnership, the tax department can initiate necessary procedures against the firm/partnership.

The Income tax returns for the financial year (2001-2002) shall be filed according to the Income Tax Ordinance 1979. This will be the last financial year for filing returns as per the old income tax rules and procedures. From the next financial year (2002-2003) the returns will be filed according to the new Income Tax Ordinance 2001. SMEDA will be up dating its front office documents relating to income tax rules and procedures according to the new ordinance shortly.

ANNEXURE I

ADDRESSES OF INCOME TAX OFFICES IN MAJOR CITIES

Income Tax Offices in Lahore: Address: Income Tax Building, Syed Mauj Darya Road, Lahore. Fax number: 042-9211857

Income Tax Offices in Karachi: Address: Income Tax Office, Sharah-e- Kamal Attaturk, Karachi. Fax number: 021-2628624 Income Tax Office, Northern Region Islamabad Address: House no.110-H, Lukman Hakeem Road, Sector G-6/3, Islamabad. Fax Number: 051-9204904 Income Tax Office, Islamabad Address: Buland Markaz, Blue area Islamabad Fax Number: 051 -9203670 Income Tax Office, Rawalpindi Address: 12 Mayo Road Fax Number: 051-9270422

Income Tax Office, Gujranwala Address: Income Tax Department, GT Road, Gujranwala Fax Number: 0431- 291401 Income Tax Office, Sailkot Address: Income Tax Department, Katchehry Road, Sialkot Fax Number: 0432-267296 Income Tax Office,Peshawar Address: Income Tax Department, Jamrud Road, Peshawar Fax Number: 091-9216140 Income Tax Office, Multan Address: Income Tax Department, 57-B, Sher Shah Road, Multan Fax Number: 061-585219 Income Tax Office, Faisalabad Address: Income Tax Department, Opposite Allied Hospital, Sargodha Road Fax Number: 041- 761433

Income Tax Procedure Of Firm/ Partnership Policy, Planning & Strategy

15

ANNEXURE II

SAMPLE FORMS

• Form for NTN (IT-A) • Form of Income Tax Returns (IT11 A) • Tax payment Challans (IT 31 A,B,C,D)

IT-A Application for the Issuance of National Tax Number (NTN)

(For Registered Firms and Companies)

Category (please tick one): Registered Firm Company

Name of Business:

(Please type in capital letters) Business Address:

Phone: (Res.) _________________________ (Bus.) _________________________ Fax: _________________________ Principal Business Activity:

Manufacturer Importer Exporter Distributor Wholesaler Retailer Services Others Description of Business: _________________________________________________________________________________ Principal place of business (address): ______________________________________________________________________ Company type Public Ltd. Private Ltd. Non-Resident Company Others

(if yes, please specify) Reg./Inc. No: Reg./Inc. No: (Please attach copy of documents) Residential Status: Resident Non-Resident Old NTN (if any):

PARTICULARS OF PARTNERS/DIRECTORS

1. Name ____________________________________________________________________________________________

NTN: - - NIC: - - (Please attach attested copy of NIC) 2. Name ____________________________________________________________________________________________




NTN: - - NIC: - - (Please attach attested copy of NIC) (Use additional sheet if required) I, the undersigned solemnly declare that to the best of my knowledge and belief the information given above is correct and complete. Name: _________________________________________ Signature of the Principal Officer/Managing Partner

Designation: ___________________________ Official Seal: ________________________________ Date: _______________________

Note:- Please make sure that all information is correctly filled-in and required documents are attached, especially the photocopies of NICs of all the

Partners/Directors and Incorporation/Registration Certificate. Class-I gazetted officer or an officer of the bank should attest all documents. NTN certificate will not be issued if incomplete form is sent. In case the applicant is a Registered Firm or a Company, its application will not be entertained unless accompanied by applications of individual Partners/Directors who do not have an NTN.

Sent to: Business Development Manager NTN Center, CBR House, Constitution Avenue, Islamabad. Ph: 9207540 (Ext. 346)

RETURN ACKNOWLEDGMENT RECEIPT Serial No. Assessment Year Zone Circle National Tax No. Firm’s Registration No. Name (Block Letters) Address (House/Bldg.) (Street/Road) (City)

Signature and Name of Receiving Official Total Income Declared (Other than income shown in Annex VII) Tax Paid along with Return

Signature of the Assessee

- - -

Rule 190(2) IT-11A FOR REGISTERED FIRMS

FORM OF RETURN OF INCOME UNDER THE INCOME TAX ORDINANCE, 1979

Serial No.

(Please mark � in the relevant box)

Residential Status Resident 1 Non-Resident 2

(to be filled in by the Dept.)

SUMMARY OF RETURN 1. Total Income 7. Purchases during the year

2. Tax Payable 8. Sales/Receipts during the year

3. Tax Paid U/S 50 9. Value of Closing Stocks

4. Tax Paid U/S 53 10. Gross Profit

5. Tax Paid along with Return 11. Net Profit

6. Value of Opening Stocks 12. No. of Documents Attached

13. Income assessed or declared last year

(whichever is higher)

Income Year ended on : Assessment Year : Zone Circle National Tax No. Firm Registration No. Date of Registration (Day/Month/Year) Sales Tax Registration No. _____________ Name of Firm (Block Letters) Address (House/Bldg.) (Street/Road) (City) Phone No (s) (i). Fax No.

(ii) E-mail

Circle Inward No.

Business Nature

Business Code

- - -

DOCUMENTS ATTACHED (Please mark � for documents attached)

1. Copies of :- (a) Trading/Manufacturing Account and P&L Account (b) Balance Sheet (c) Depreciation Chart as per Third Schedule (d) Copies of personal accounts of partners 1. Details of tax deducted at source under Section 50 (as withholding agent) and its payment into government treasury,

wherever required by the law to do so. 3. In case of professional’s firms, certificate stating that the accounts have been maintained as prescribed in rules 27 to 33

whichever is applicable. 4. Details of items of Income mentioned in Annex(es) I to VIII

5. Evidence of payment of (a) Tax Deducted / Paid U/S 50 (b) Tax Paid U/S 53 (c) Tax Paid U/S 54 (d) Tax Paid U/S 80 D (e) Workers Welfare Fund (f) Zakat

(g) Contribution to Bait-ul-Mal Fund/Donations Note : If any of the documents prescribed under the Income Tax Rules as part of the return are not enclosed, the return is liable to be considered as invalid return under the law.

PART I COMPUTATION OF INCOME

Description Code Amount

1. Interest on Securities (Annex I) 1999

2. Income/Loss from House Property (Annex II) 2999

3. Income/Loss from Business/Profession 3999

4. Capital Gains (Annex IV) 4999

5. Income from other Sources (Annex V) 5999

6. Foreign income (Annex VI) 6999

7. Other income 5299

8. Total (1 to 7) 9100

9. Exclusions from Income

a) Zakat deducted 9121

b) Donation to Bait-ul-Mal 9122

c) Others 9138

d) Total exclusions (a to c) 9139

10. Total Income (8 minus 9) 9140 Assessed business Loss b/f from preceding year 3190

Assessed business Loss c/f to next year

Assessed unabsorbed depreciation b/f from preceding year 3188

Assessed unabsorbed depreciation c/f to next year

PART II COMPUTATION OF TAX

Description / Particulars Code Amount

1. Total Income (As per Part I) 9140

2. Super tax on total income excluding long term capital gains* 9205

3. Super tax on long term capital gains* 9206

4. Gross income tax (2 + 3) 9201

5. Tax reductions (Annex VIII) 9259

6. Tax rebates (Annex IX) 9279

7. Income tax (4 minus (5 + 6)) 9280

8. Surcharge 9301

9. Tax (7 + 8) 9305

10. Tax u/s (80D + 80DD) 9295

11. Additional tax u/s 87 9311

12. Additional tax u/s 88 9312

13. Worker’s Welfare Fund 9125

14. Tax chargeable (9 or 10 (whichever is higher) + (Add 11 to 13)) 9400

15. Tax payments (Annex X) 9450 .

ANNEX I

INTEREST ON SECURITIES U/S 17


1. Amount of Interest receivable 1499

2. Deductions

i. Interest paid on money borrowed for the purpose of investment on

securities

1501

ii. Commission paid 1502

iii. Total expenditure (i. + ii ) 1599

3. Net Income/(loss) (1 minus 2(iii)) 1999

ANNEX II

INCOME FROM HOUSE PROPERTY U/S 19 Address and Description of the property Property No. 1 Property No. 2 Property No. 3

Description / Particulars Code Property No.1 Amount

Property No.2 Amount

Property No.3 Amount

Total Amount

1. Annual Letting Value 2101 2. 1/10th of the un-adjustable

advance/security deposit from the tenant

2115

3. Total 2118 4. 1/5th of the annual value for

repairs

2103

5. Insurance premium * 2104 6. Interest on capital borrowed for

investment in the property *

2105

7. Share in rental income paid to HBFC/Banks

2106

8. Interest on mortgage/capital charge

2107

9. Provincial /local property tax * 2108

10. Ground rent 2109 11. Collection charges * 2110 12. Amount claimed on account of

property remaining vacant

2111

13. Legal service charges 2113

14. Amount claimed as irrecoverable rent

2116

15. Total (Add 4 to 14) 2117

16. Net Income/(loss) 17. (3 minus 15)

2119

18. In case assessee is co-owner of property, percentage of share

2121

19. Assessable income 2120 • Attach evidence of payment ** Property related Wealth Tax Only

ANNEX IV

CAPITAL GAINS U/S 27

Description / Particulars Code Amount 1. Proceeds on disposal of short term Capital assets 4101 2. Cost of acquisition of short term Capital assets 4501 3. Admissible expenses / exemptions on short term Capital assets

4502

4. Net short term Capital Gains/(loss) (1minus (2 + 3)) 4199 5. Proceeds on disposal of long term Capital assets

4201

6. Cost of acquisition of long term Capital assets 4551

7. Admissible expenses / exemptions on long term Capital assets 4552

8. Net long term Capital Gains/(loss) (5 minus (6 + 7)) 4299

9. Net Income/(loss) (4 + 8) 4999

ANNEX V INCOME FROM OTHER SOURCES U/S 30

Description Code Amount

1. Royalty 5101

2. Interest 5104

3. Fees for technical services 5105

4. Ground rent 5106

5. Income form hire of building/machinery/plant/furniture 5121

6. Others 5199

7. Total (Add 1 to 6) 5499

8. Admissible expenditure in respect of other income 5503

9. Current repairs in respect of hired assets 5504

10. Insurance premium 5505

11. Depreciation 5506

12. Others 5530

13. Total (Add 8 to 12) 5599

14. Net Income/(loss) (7 minus 13) 5999

ANNEX VI FOREIGN INCOME


1. Interest on Securities 6501

2. Income from House Property 6502

3. Income from Business/Profession 6503

4. Capital Gains 6504

5. Income from Other Sources 6505

6. Net Income/(loss) (Add 1 to 5) 6999

ANNEX VII INCOME CLAIMED TO BE EXEMPT AND NOT INCLUDED IN TOTAL INCOME

Nature of Income Basis of Claim for Exemption Code Amount 6101

6102

6103

6104

6105

Total 6199

ANNEX VIII

TAX REDUCTIONS

Description / Particulars Code Eligible Amount Reduction Amount 1. Documented imports/wholesale 9742

2. Others 9748

3. Total tax reductions (1 + 2) 9759

ANNEX IX TAX REBATES ON AVERAGE RATE OF TAX

Description / Particulars Code Eligible Amount Rebate Amount

1. Donations for charitable purposes 9762

2. Inclusions in income for tax rate purposes 9764

3. Others 9778

4. Total tax rebates (Add 1 to 3) 9779 ANNEX X

TAX PAYMENTS

Description / Particulars Code Amount 1. At source u/s 50 (other than presumptive tax) 9404

2. In advance u/s 53 9408

3. With Return u/s 54 9412

4. Adjustment of refund determined by the Department 9436

5. Total tax paid (Add 1 to 4) 9450

ANNEX XI PARTICULARS OF PARTNERS

Name and address

of each partner/ member

N.I.C %ages share in profi/loss

Interest on loan; salary, commission or

Other remuneration if any, paid or payable

To partner/member

(1) (2) (3) (4)

1. Use additional sheets if required. 2. Please ensure that the amounts shown in col. 4 of Annex XI have been added in the total income declared.

VERIFICATION

I, the undersigned, solemnly declare that to the best of my knowledge and belief

(a) the information given in this Return and the Annex(es) and statement(s) accompanying it is correct and complete;

(b) the amount of income and other particulars are truly stated; (c) during the year for which this Return is made -

(i) no other income was received, or can be deemed to have been received by the firm; (ii) no other income accrued or arose or can be deemed to have accrued or arisen to firm; (iii) the firm had no other source of income; and (iv) the firm was resident/non-resident in Pakistan.

I, further declare that I am competent to make this Return and verify it in my capacity as of Date Name Signature (in block letters) NIC No. • The alternative in the verification which are not applicable should be scored out. Note: 1. Any person making false statement or furnishing inaccurate particulars is liable to

penalty/prosecution or both under the Income Tax Ordinance, 1979. 2. The verification should be signed by the partner.