taxation presented by anwar kashif mumtaz partner saiduddin & co. advocate, taxation, management...

TAXATION

Presented By

ANWAR KASHIF MUMTAZPartner

Saiduddin & Co.Advocate, Taxation, Management & Company Law Consultantswww.saiduddin.com.pk

at

Karachi Tax Bar AssociationProfessional Development Program-2015

Topics-First Schedule

-Second Schedule

-Tax Credit U/s. 65, 100C, Rule 212 to

220B

-Set of Losses

-Depreciation

-FTR/NTR/MTR

-WWF/WPPF

FIRST SCHEDULEPART - I

FIRST SCHEDULERATE OF TAX FOR INDIVIDUALS & AOPS PART I - DIVISION I CLAUSE 1

S No.

Taxable Income Rate for the Tax year 2015

Rate for the Tax year 2016

1Taxable Income 400,000 0% 0%

2 Taxable Income 400,000 to 500,000

10% of the amount exceeding Rs. 400,000/-


3 Taxable Income 500,000 to 750,000


Rs. 7,000+ 10% of the amount exceeding Rs.

500,000/-4 Taxable Income 750,000 to

1,500,000Rs.35,000 + 15% of the amount

exceeding Rs.750,000Rs.32,000 + 15% of the

amount exceeding Rs.750,000

5 Taxable Income 1,500,000 to 2,500,000

Rs.147,500 + 20% of the amount exceeding Rs.1,500,000

Rs.144,500 + 20% of the amount exceeding

Rs.1,500,0006 Taxable Income 2,500,000 to

4,000,000Rs.347,500 + 25% of the

amount exceeding Rs.2,500,000Rs.344,500 + 25% of the

amount exceeding Rs.2,500,000

7 Taxable Income 4,000,000 to 6,000,000

Rs.722,500 + 30% of the amount exceeding Rs.4,000,000

Rs.719,500 + 30% of the amount exceeding

Rs.4,000,0008 Taxable Income 6,000,000

exceedsRs.1,322,500 + 35% of the

amount exceeding Rs.6,000,000Rs.1,319,500 + 35% of the


FIRST SCHEDULERATE OF TAX FOR SALARIED INDIVIDUALS PART I - DIVISION I CLAUSE 1AS No.

Taxable Income Rate for the Tax year 2015 Rate for the Tax year 2016

1 Taxable Income 400,000 0% 0%2 Taxable Income 400,000 to 500,000

5% of the amount exceeding Rs.400,0002% of the amount exceeding

Rs.400,0003 Taxable Income 500,000 to 750,000

5% of the amount exceeding Rs.500,000Rs. 2,000 + 5% of the amount

exceeding Rs.500,000%4 Taxable Income 750,000 to

1,400,000Rs.17,500 + 10% of the amount

exceeding Rs.750,000Rs.14,500 + 10% of the amount

exceeding Rs.750,0005 Taxable Income 1,400,000 to

1,500,000Rs.82,500 + 12.5% of the amount

exceeding Rs.1,400,000Rs.79,500 + 12.5% of the

amount exceeding Rs.1,400,0006 Taxable Income 1,500,000 to

1,800,000Rs.95,000 + 15% of the amount

exceeding Rs.1,500,000Rs.92,000 + 15% of the amount

exceeding Rs.1,500,0007 Taxable Income 1,800,000 to

2,500,000Rs.140,000 + 17.5% of the amount



3,000,000Rs.262,500 + 20% of the amount



3,500,000Rs.362,500 + 22.5% of the amount



4,000,000Rs.475,000 + 25% of the amount



7,000,000Rs.600,000 + 27.5% of the amount


amount exceeding Rs.4,000,00012 Taxable Income exceed 7,000,000 Rs.1,425,000 + 30% of the amount

exceeding Rs.7,000,000Rs.1,422,000 + 30% of the


Section 149

FIRST SCHEDULERATE OF TAX FOR SALARIED INDIVIDUALS PART I - DIVISION I CLAUSE 1B

Where the taxable income in a tax year, other than income on which the deduction of tax is final, does not exceed one million rupees of a person- holding a National Database Registration Authority’s Computerized National Identity Card for disabled persons; or

a taxpayer of the age of not less than sixty years on the first day of that tax year;

the tax liability on such income shall be reduced by 50%.]

FIRST SCHEDULERATE OF TAX FOR COMPANIES PART I - DIVISION II

Rate of tax for companies, other than a banking company, shall be :

33% for the tax year 201532 % for the tax year 201631% for the tax year 201730% for the tax year 2018

&Rate of tax for small company shall be 25%

FIRST SCHEDULERATE OF SUPER TAX PART I - DIVISION IIA

S No.

PersonRate for super Tax

for the tax year 2015

1 Banking Company 4% of the income

2 Person, other than a banking company, having income equal to or exceeding Rs. 500 million

3% of the income

Super Tax has been levied on income of all Banks irrespective of the quantum of their income and on other persons having income of Rs. 500 million or more for the rehabilitation of temporally displaced persons.

Section 4B

FIRST SCHEDULERATE OF DIVIDEND TAX PART I - DIVISION III7.5% in the case of dividends declared or distributed by purchaser of a power project privatized by WAPDA or on shares of a company set up for power generation or on shares of a company, supplying coal exclusively to power generation projects; and

10% in case of dividend received by a person from mutual fund

12.5% in other cases.

FIRST SCHEDULERATE OF DIVIDEND TAX PART I - DIVISION III7.5% in the case of dividends declared or distributed by purchaser of a power project privatized by WAPDA or on shares of a company set up for power generation or on shares of a company, supplying coal exclusively to power generation projects; and

10% in case of dividend received by a person from mutual fund.

12.5% in other cases.

Dividend received by a person from a stock fund shall be taxed at the rate of 12.5% for tax year 2015 and onwards, if dividend receipts are less than capital gains

Dividend received by a company from a collective investment scheme, RIET Scheme or a mutual fund, other than a stock fund, shall be taxed at the rate of 25% for tax year 2015 and onwards. Provided that if a Developmental REIT Scheme with the object of development and construction of residential buildings is set up by thirtieth day of June, 2018, dividend received by a person from such Developmental REIT Scheme shall be reduced by fifty percent for three years from thirtieth day of June, 2018

FIRST SCHEDULERATE FOR PROFIT O DEBT PART I - DIVISION IIIA

S No.

Profit on Debt Rate of tax for 2015

Rate of tax for 2016

1 Where profit on debt does not exceed Rs. 25,000,000

10% 10%

2 Where profit on debt exceeds Rs. 25,000,000 but does not exceed 50,000,000

10% 12.5%

3 Where profit on debt exceeds Rs. 50,000,000 10% 15%

FIRST SCHEDULERATE OF TAX ON CERTAIN PAYMENTS TO NON-RESIDENT

PART I - DIVISION IV

The rate of tax imposed under section 6 on payments to non-residents shall be 15% of the gross amount of the royalty or fee for technical services

FIRST SCHEDULERATE OF TAX ON SHIPPING OR AIR TRANSPORT INCOME OF A NON-RESIDENT PERSON PART I – DIVISION V

The rate of tax imposed under section 7 shall be – (a)in the case of shipping income, 8% of the gross amount received or receivable; or (b)in the case of air transport income, 3% of the gross amount received or receivable.

FIRST SCHEDULECAPITAL GAINS ON DISPOSAL OF SECURITIES PART I – DIVISION VII

S.No.

Period Tax year 2014

Tax year 2015

Tax year 2016

1 Where holding period of a security is less than six month 10% 12.5% 15%

2 Where holding period of a security is six month but less then twelve months

8% 12.5% 15%

3 Where holding period of a security is twelve months or more but less than twenty four months

8% 10% 12.5%

4 Where holding period of a security is twenty four months or more but less than four years

0% 0% 7.5%

FIRST SCHEDULECAPITAL GAINS ON DISPOSAL OF SECURITIES PART I – DIVISION VII

Provided that the rate for companies shall be as specified in Division II of Part I of First Schedule, in respective of debt securities;

Provided further that a mutual fund or a collective investment scheme or a REIT scheme shall deduct Capital Gains Tax at the rates as specified below, on redemption of securities as prescribed, namely:-

S.No. Category Rate

1Individual and association of persons

10% for stock funds 10% for others

2Company 10% for stock funds 25% for

othersProvided further that in case of a stock fund if dividend receipts of the fund are less than capital gains, the rate of tax deduction shall be 12.5%. Provided further that no capital gain tax shall be deducted if the holding period of security is more than 4 Years

FIRST SCHEDULECAPITAL GAINS ON DISPOSAL OF IMMOVABLE PROPERTY

PART I – DIVISION VIIIThe rate of tax to be paid under sub-section (1A) of section 37 shall be as follows:—

S.No(1)

Period(2)

Rate of Tax(3)

1. Where holding period of Immovable property is up to one year.

10%

2. Where holding period of Immovable property is more than one year but not more than two years.]

5%

3. Where holding period of immovable property is more than two years.

0%

FIRST SCHEDULEMINIMUM TAX UNDER SECTION 113 PART I – DIVISION IXS.No.

Person(s) Minimum Tax

1.

(a) Oil marketing companies, Oil refineries, Sui Southern Gas Company Limited and Sui Northern Gas Pipelines Limited ( for the cases where annual turnover exceeds rupees one billion.); (b) Pakistan International Airlines Corporation; and (c) Poultry industry including poultry breeding, broiler production, egg production and poultry feed production. (d) Dealers or distributors of fertilizers.; and

0.5% of the person’s

turnover for the year

2.

(a) Distributors of pharmaceutical products, fast moving consumer goods and cigarettes; (b) Petroleum agents and distributors who are registered under the Sales Tax Act, 1990; (c) Rice mills and dealers; and (d) Flour mills.

0.2% of the person’s


3.

Motorcycle dealers registered under the Sales Tax Act, 1990 0.25%of the person’s


4.

In all other cases. 1% of the person’s


FIRST SCHEDULEPART - II

FIRST SCHEDULERATE OF ADVANCE TAX U/S. 148 Part II

S.No.

Person Filer Non-Filer

1 (i) Industrial undertaking importing remeltable steel (PCT Heading 72.04) and directly reduced iron for its own use;(ii) Persons importing potassic fertilizers in pursuance of Economic Coordination Committeeof the cabinet’s decision No.ECC-155/12/2004 dated the 9th December,2004; (iii) Persons importing urea;(iv) Manufacturers covered under Notification No. S.R.O. 1125(I)/2011 dated the 31st December, 2011 and importing items covered under S.R.O. 1125(I)/2011 dated the 31st December, 2011(v) Persons importing Gold; and(vi) Persons importing Cotton(vi) Designated buyer of LNG on behalf of Govt. of Pakistan to Import LNG

1% of the import

value as increased

by customs-

duty, sales tax and federal excise duty

1.5% of the import

value as increased

by customs duty, sales

tax and federal

excise duty

FIRST SCHEDULERATE OF ADVANCE TAX U/S. 148 PART IIS.No. Person Filer Non-Filer2 Persons importing pulses 2% of the import

value as increased by customs-duty, sales tax and federal excise duty

3% of the importvalue as increasedby customs duty, sales tax and federal excise duty

3 Commercial importers covered under Notification No. S.R.O. 1125(I)/2011 dated the 31st December, 2011 and importing items covered under S.R.O. 1125(I)/2011 dated the 31st December, 2011.

3% of the import value as increased by customs-duty, sales tax and federal excise duty

4.5% of the import

value as increased

by customs duty, sales tax and federal excise duty

4 Ship breakers on import of ships 4.5% 6.5%5 Industrial undertakings not covered

under S. Nos. 1 to 4 5.5% 8%

6 Companies not covered under S. Nos. 1 to 5 5.5% 8%

7 Persons not covered under S.Nos. 1 to 6 6% 9%

FIRST SCHEDULEPart - III

FIRST SCHEDULEADVANCE TAX ON DIVIDEND U/S. 150 PART III- DIVISION I

7.5% in the case of dividends declared or distributed by purchaser of a power project privatized by WAPDA or on shares of a company set up for power generation or on shares of a company, supplying coal exclusively to power generation projects; and

Dividends other than above;Filer at the rate of [12.5%] or Non-filers at the rate of [17.5%]

Dividend received by a person from a stock fund shall be taxed at the rate of 12.5% for tax year 2015 and onwards, if dividend receipts are less than capital gains

Dividend received by a company from a collective investment scheme, RIET Scheme or a mutual fund, other than a stock fund, shall be taxed at the rate of 25% for tax year 2015 and onwards. Provided that if a Developmental REIT Scheme with the object of development and construction of residential buildings is set up by thirtieth day of June, 2018, dividend received by a person from such Developmental REIT Scheme shall be reduced by fifty percent for three years from thirtieth day of June, 2018

FIRST SCHEDULEPROFIT ON DEBT U/S. 151 PART III- DIVISION IA

2015 2016Filer Non Filer Filer Non Filer 10% 15% 10% 17.5%

Provided that for a non-filer, if the yield or profit paid is rupees five hundred thousand or less, the rate shall be ten per cent”;

FIRST SCHEDULEPAYMENTS TO NON-RESIDENTS U/S. 152 PART III- DIVISION II

S# Description Rate

1.

Royalties or fee for technical services to non-residents other than their PEs in Pakistan

15% of the gross amount or reduced

rate under DTA

2.Execution of contract or sub-contract assembly or installation including supply of supervisory activity in relation to such project

6%

3.Contract for advertisement services rendered by satellite channel 6%

4. Payment of insurance and re-insurance premium 5%

5.Payment of advertisement services to a non resident, media person relaying from outside Pakistan

10%

6.Any other payment to non-resident, not otherwise specified. 20%

7.Payment for profit on debt to a non-resident having no permanent establishment in Pakistan [clause (5A) Part-II 2nd schedule.}

10%

FIRST SCHEDULEPAYMENTS TO NON-RESIDENTS U/S. 152 PART III- DIVISION II

2015 2016Company Other than

Company

Filer Non Filer Filer Non File

r

Supplies 3.5% 4% 6% 4.5% 6.5%Transport Services

2% 2% 2% 2% 2%

Other services

6% 8% 12% 10% 15%

Contract 6% 7% 10% 7.5% 10%Sports

Persons-

10%

FIRST SCHEDULEPAYMENTS FOR GOODS OR SERVICES U/S. 153 PART III- DIVISION III

Company Other than Company

Filer Non Filer Filer Non File

r

Supplies 4% 6% 4.5% 6.5%Transport Services 2% 2% 2% 2%

Other services 8% 12% 10% 15%Contract 7% 10% 7.5% 10%

Sports Persons 10%Every Exporter or Export House shall deduct Tax on payments in respect of services of stitching, dying, printing etc. received/provided. Division IV (Para-3) of Part-III of 1st Schedule

1%

FIRST SCHEDULEEXPORTS U/S. 154 PART III- DIVISION IV

S# Description Rate

1.

On realization of proceeds on account of export of goods [ exemption to cooking oil or vegetable ghee exported to Afghanistan if tax u/s 148 is paid]

1%

2.

On realization of proceeds on account of commission to; I. Non-export indenting agent II. Export indenting agent / export buying house

5%

3.

On realization of proceeds on account of sale of goods to an exporter under inland back to back LC or any other arrangement as may be prescribed by FBR

1%

4. Exports of goods located in EPZ 1%

5.Payment to indirect exporters as defined in DTRE( Duty & Tax Remission for exporters) rules, 2001

1%

6. Clearance of goods exported 1%

FIRST SCHEDULEINCOME FROM PROPERTY U/S. 155 PART III- DIVISION V

S.No. Gross amount of rent Rate of tax(1) (2) (3)1. Where the gross amount of rent does not

exceed Rs.150,000Nil

2. Where the gross amount of rent exceeds Rs.150,000 but does not exceed Rs.1,000,000

10 % of the gross amount exceeding Rs.150,000.

3. Where the gross amount of rent exceeds Rs. 1,000,000

Rs. 85,000 + 15% of the gross amount exceeding

Rs. 1,000,000.

The rate of tax to be deducted under section 155, in the case of company shall be 15% of

the gross amount of rent.

FIRST SCHEDULEPRIZES AND WINNINGS U/S. 156 PART III- DIVISION VI

S.No. Gross amount of rent Rate of tax(1) (2) (3)1. Payments made for prize on quiz bond

and cross word 15%

2. Payments on winning from a raffle, lottery, prize on winning a quiz, prize, offered by companies for promotion of sale crossword puzzles

20 %

FIRST SCHEDULEPETROLEUM PRODUCTS U/S. 156A PART III- DIVISION VIA

Payment to petrol pump operator on account of sale of petroleum products

Filer Non Filer

12% 15%

FIRST SCHEDULECNG STATIONS U/s. 234A PART III- DIVISION VIB

DESCRIPTION RATE

On the amount of gas bill of a Compressed Natural Gas

4%

FIRST SCHEDULEPART - IV

FIRST SCHEDULEBROKERAGE & COMMISSION U/s. 233 PART IV- DIVISION II

S.No.

Category 2015 2016

Filer Non-Filer

1 Advertising agents 7.5% 10% 15%

2 Other cases 12% 12% 15%

FIRST SCHEDULERATES FOR COLLECTION OF TAX BY A STOCK EXCHANGE REGISTERED IN PAKISTANU/S. 233A PART IV- DIVISION IIA

S.# Description Rates(i) in case of purchase of shares as per

clause (a) of sub-section (1) of section 233A.

[0.01%] of purchase value

(ii) in case of sale of shares as per clause (b) of sub-section (1) of section 233A.

[0.01%] of sale value

FIRST SCHEDULERATES FOR COLLECTION OF TAX BY NCCPL U/S. 233AA

PART IV- DIVISION IIB

The rate of deduction under section 233AA shall be 10% of profit or mark-up or interest earned by the member, margin financier or securities lender.

FIRST SCHEDULETAX ON MOTOR VEHICLES U/S. 234 PART IV- DIVISION III

(1) In case of goods transport vehicles, tax of two rupees and fifty paisa per kilogram of the laden weight shall be charged for filer and four rupees per kilogram of the laden weight for non-filer.;

(2) In case of passenger transport vehicles plying for hire with registered seating capacity of S.No.

Capacity Rs. Per seat per annum2015 2016

Non-Filer

Non-Filer

1 Four or more persons but less than ten persons

25 50 100

2 Ten or more persons but less than twenty persons

60 100 200

3 Twenty persons or more 500 300 500

FIRST SCHEDULETAX ON MOTOR VEHICLES U/S. 234 PART IV- DIVISION III

(1) ) In case of other private motor vehicles shall be as following :

S. no. Engine capacity 2015 2016Filer Non-Filer Filer Non-Filer

1 Upto 1000 cc 1,000 1,000 800 1,2002 1001cc to 1199cc 1,800 3,600 1,500 4,0003 1200cc to 1299cc 2,000 4,000 1,750 5,0004 1300cc to 1499cc 3,000 6,000 2,500 7,5005 1500cc to 1599cc 4,500 9,000 3,750 12,0006 1600cc to 1999cc 6,000 12,000 4,500 15,0007 2000cc & above 12,000 24,000 10,000 30,000

FIRST SCHEDULEELECTRICITY CONSUMPTION U/S. 235 PART IV- DIVISION IV

Rate of collection of tax under section 235 where the amount of electricity bill, [(a) does not exceed Rs. 400 Rs. [0] (b) exceeds Rs. 400 but does not exceed Rs. 600 Rs. 80 (c) exceeds Rs. 600 but does not exceed Rs. 800 Rs. 100 (d) exceeds Rs. 800 but does not exceed Rs. 1000 Rs. 160 (e) exceeds Rs. 1000 but does not exceed Rs. 1500 Rs. 300 (f) exceeds Rs. 1500 but does not exceed Rs. 3000 Rs. 350 (g) exceeds Rs. 3000 but does not exceed Rs. 4500 Rs. 450 (h) exceeds Rs. 4500 but does not exceed Rs. 6000 Rs. 500 (i) exceeds Rs. 6000 but does not exceed Rs. 10000 Rs. 650 (j) exceeds Rs. 10000 but does not exceed Rs. 15000 Rs. 1000 (k) exceeds Rs. 15000 but does not exceed Rs. 20000 Rs. 1500 (l) exceeds Rs. 20000. [(i) at the rate of 10 percent or commercial consumers;

ii) at the rate of 5 percent for industrial consumers.

FIRST SCHEDULETELEPHONE USER U/S. 236 PART IV- DIVISION V

Description Rate of TaxTelephone subscribers, where monthly bill exceeding 1,000

10% of the exceeding amount of bill

Subscriber of internet, mobile telephone and pre-paid internet ortelephone card

14% of the amount of bill or sales price of internet pre-paid card or prepaid telephone card or sale of units through any electronic medium or whatever form.

FIRST SCHEDULECASH WITHDRAWAL FROM A BANK U/S. 231A PART IV- DIVISION VI

Payment of cash withdrawal exceeding Rs, 50,000/- in a day, 0.3% of the cash amount withdrawn[for filers and 0.6% of the cash amount withdrawn, for non filers

FIRST SCHEDULECASH WITHDRAWAL FROM A BANK U/S. 231AAA PART IV- DIVISION VI

Sale against cash of any instrument including demand draft, payment order, CDR, STDR, RTC, any other instrument of bearer nature or on receipt of cash on cancellation of any of these instruments

Filer Non Filer

0.3% 0.6%

FIRST SCHEDULEADVANCE TAX ON PURCHASE, REGISTRATION AND TRANSFER OF MOTOR VEHICLES U/S. 231B PART IV- DIVISION VII

S. no.

Engine capacity 2015 2016Filer Non Filer Filer Non Filer

1 Upto 850cc 10,000 10,000 10,000 10,0002 851cc to 1000cc 20,000 25,000 20,000 25,0003 1001cc to 1300cc 30,000 40,000 30,000 40,0004 1301cc to 1600cc 50,000 100,000 50,000 100,0005 1601cc to 1800cc 75,000 150,000 75,000 150,0006 1801cc to 2000cc 100,000 200,000 100,000 200,0007 2001cc to 2500cc 150,000 300,000 150,000 300,0008 2501cc to 3000cc 200,000 400,000 200,000 400,0009 Above 3000cc 250,000 450,000 250,000 450,000

The rate of tax under sub-sections (1) and (3) of section 231B shall be as follows

FIRST SCHEDULEADVANCE TAX ON PURCHASE, REGISTRATION AND TRANSFER OF MOTOR VEHICLES U/S. 231B PART IV- DIVISION VII

The rate of tax under sub-sections (2) of section 231B shall be as follows:S. no.

Engine capacity 2015 2016Filer Non Filer Filer Non Filer

1 Upto 850cc 10,000 10,000 - 5,0002 851cc to 1000cc 20,000 25,000 5,000 15,0003 1001cc to 1300cc 30,000 40,000 7,500 25,0004 1301cc to 1600cc 50,000 100,000 12,500 65,0005 1601cc to 1800cc 75,000 150,000 18,750 100,0006 1801cc to 2000cc 100,000 200,000 25,000 135,0007 2001cc to 2500cc 150,000 300,000 37,500 200,0008 2501cc to 3000cc 200,000 400,000 50,000 270,0009. Above 3000cc 250,000 450,000 62,500 300,000

Provided that the rate of tax to be collected shall be reduced by 10% each year from the date of first registration in Pakistan

FIRST SCHEDULE ADVANCE TAX AT THE TIME OF SALE BY AUCTION U/S. 236A

PART IV- DIVISION VIII

Any person making sale by public auction / tender of any property or goods shall deduct tax at the rate of 10%.

FIRST SCHEDULE ADVANCE TAX ON PURCHASE OF AIR TICKET U/S. 236B PART IV- DIVISION IX

The airline issuing air ticket shall charge advance tax a the rate 5% of gross amount of ticket .

FIRST SCHEDULEADVANCE TAX ON SALE OR TRANSFER OF IMMOVABLE PROPERTY

U/S. 236C PART IV- DIVISION X

Transfer or attesting transfer of Immoveable property .

Filer Non Filer

0.5% 1%

FIRST SCHEDULE ADVANCE TAX ON FUNCTIONS AND GATHERINGS U/S.

236D PART IV-DIVISION XI

Every Owner, Manager & operator of the Marriage Hall, Club, Hotel, Marquee etc shall collect tax on the total amount of bill paid by a person holding or arranging functions.

5%

FIRST SCHEDULE ADVANCE TAX ON FOREIGN-PRODUCED FILMS AND TV

PLAYS U/S. 236E PART IV-DIVISION XII

Any licensing authority shall collect tax while certifying any foreign Tv drama serial or a play dubbed in urdu or any regional language for seeing and viewing on any channel landing right .

a) Drama serial Rs. 100,000/= per episode

(b)Play Rs. 100,000/-(single Play)

FIRST SCHEDULEADVANCE TAX ON CABLE OPERATORS & OTHER ELECTRONICS U/S.

236FPART IV-DIVISION XIII

License Category as provided in PEMRA Rules

Tax on License Fee Tax on Renewal

H Rs. 7,500 Rs. 10,000H-I Rs. 10,000 Rs. 15,000H-II Rs. 25,000 Rs. 30,000R Rs. 5,000 Rs. 30,000B Rs. 5,000 Rs. 40,000

B-1 Rs. 30,000 Rs. 50,000B-2 Rs. 40,000 Rs. 60,000B-3 Rs. 50,000 Rs. 75,000B-4 Rs. 75,000 Rs. 100,000B-5 Rs. 87,500 Rs. 150,000B-6 Rs. 175,000 Rs. 200,000B-7 Rs. 262,500 Rs. 300,000B-8 Rs. 437,500 Rs. 500,000B-9 Rs. 700,000 Rs. 800,000

B-10 Rs. 875,500 Rs. 900,000

PEMRA shall collect tax on issuance of license for distribution or renewal of license to a license

FIRST SCHEDULEADVANCE TAX ON SALES TO DISTRIBUTORS, DEALERS OR WHOLESALERSU/S. 236G PART IV-DIVISION XIVEvery Manufacture or Commercial importer of electronics sugar, cement, iron & steel products, fertilizers, motorcycles, pesticides, Cigarettes glass, textile, beverages, paint or foam sector shall collect Advance tax from wholesaler , distributor & dealers at the time of sales made to them.

Category of Sale Rate of TaxFiler Non-Filer

Fertilizers 0.7% 1.4%Other than Fertilizers 0.1% 0.2%

FIRST SCHEDULEADVANCE TAX ON SALE TO RETAILERS U/S. 236H

PART IV-DIVISION XV

Every Manufacture ,distributor, dealer, wholesaler or Commercial importer of electronics, sugar, cement, iron & steel products, motorcycles, pesticides, Cigarettes glass, textile, beverages, paint or foam sector shall collect Advance tax at the rate of 0.5 % of gross sales from retailers at the time of sales made to them

FIRST SCHEDULECOLLECTION OF ADVANCE TAX BY EDUCATIONAL INSTITUTIONS

U/S. 236I PART IV-DIVISION XVI

Every Educational institution has to collect advance Tax on the amount exceeding Rs, 200,000 per annum at the rate of 5 %

FIRST SCHEDULEADVANCE TAX ON DEALERS, COMMISSION AGENTS AND ARHATIS, ETC

U/S. 236J PART IV-DIVISION XVIIEvery Market committee shall collect tax from dealers, commission agents or Arhetis on issuance or renewal of license

Group Amount of tax (per annum)

Group or Class A: Rs. 10,000Group or Class B: Rs. 7,500Group or Class C: Rs. 5,000Any other category: Rs. 5,000

FIRST SCHEDULE ADVANCE TAX ON PURCHASE OF IMMOVABLE PROPERTY U/S. 236K PART IV-DIVISION XVIIIEvery person registering or attesting transfer shall collect Advance tax on purchase of immovable property

Where value of Immovable property is Upto 3 million

0%

Where the value immovable property is more than 3 million

Filer: 1%

Non Filer: 2%

FIRST SCHEDULE ADVANCE TAX ON DOMESTIC ELECTRICITY CONSUMPTION U/S. 235A PART IV-DIVISION XIXEvery person preparing electricity bill of Domestic consumers shall charge Advance tax

Where the amount of monthly bill is Rs. 75,000/- or more 7.5%

Where the amount of monthly bill is less than Rs. 75,000

0%

FIRST SCHEDULETAX ON INTERNATIONAL AIR TICKET U/S. 236L

PART IV-DIVISION XX

S.no

Type of Ticket Tax year 2015

Tax year 2016

1. First/Executive Class 4% Rs. 16,000 per person

2. Others excluding Economy

4% Rs. 12,000 per person

3. Economy 0% 0%

FIRST SCHEDULEADVANCE TAX ON BANKING TRANSACTIONS OTHERWISE THAN

THROUGH CASH U/S. 236P PART IV-DIVISION XXI

Every Banking Company shall collect Advance tax from non-filers on sale of instruments, including demand draft , pay order , special deposit receipt, cash deposit receipt, short term deposit receipt, call deposit receipt & rupee traveler’s cheque.

0.3%

Every Banking Company shall collect advance tax from non filers on transfer of any sum through cheaque or clearing, interbank or interbank transfers through cheaque, online / telegraphic / mail transfer.

0.3%

FIRST SCHEDULERATE OF COLLECTION OF TAX BY PAKISTAN MERCANTILE

EXCHANGE LIMITED U/S. 236P PART IV-DIVISION XXII

On Purchase of future commodity contract. 0.05%

On Sale of future commodity contract 0.05%

FIRST SCHEDULEPAYMENT TO A RESIDENT PERSON FOR RIGHT TO USE MACHINERY

AND EQUIPMENT U/S. 236Q PART IV-DIVISION XXIII

Payments for the right to use Industrial, Commercial, and scientific , equipment

10%

payments on account of rent of Machinery, Industrial, and Commercial and Scientific equipment

10%

SAMPLE Computation

Individual & AoPSales 15,000,000Rs.

Opening stock 150,000Rs. Purchases 10,500,000Rs. Closing stock 250,000Rs. CoGS 10,400,000Rs.

Gross profit 4,600,000Rs.

P & L Expenses 2,950,070Rs.

Net Profit Before Taxation 1,649,930Rs. Taxation For Taxable Income Upto 1,500,000 144,500 20% exceeding 1,500,000 29,986

174,486 Net Profit after Taxation 1,475,444Rs.

ABC & Co.TAX YEAR 2016TRADING, PROFIT & LOSS ACCOUNT

SAMPLE Computation

CompanySales 15,000,000Rs.

Opening stock 150,000Rs. Purchases 10,500,000Rs. Closing stock 250,000Rs. CoGS 10,400,000Rs.

Gross profit 4,600,000Rs.


Net Profit Before Taxation 1,649,930Rs.

Taxation @ 33% 544,477

544,477 Net Profit after Taxation 1,105,453Rs.

ABC & Co.TAX YEAR 2016TRADING, PROFIT & LOSS ACCOUNT

CompanyReceipts/Services 15,000,000Rs.



Taxation @ 33% (a) 676,477 Less: Tax Deducted at source u/s. 153 (b) 1,200,000 Tax Liability, higher of the (a) or (b) 1,200,000 Net Profit after Taxation 849,930Rs.

ABC & Co.TAX YEAR 2016PROFIT & LOSS ACCOUNT

SAMPLE COMPUTATION

Receipts/Services 15,000,000Rs.



Salary Income 1,250,000

Total Taxable Income 2,299,930Rs.

Tax as per salary slabsFor Taxable Income upto 1,800,000 137,000 17.5% exceeding 1,800,000 87,488

224,488 Net Profit after Taxation 825,442Rs.

ABC TAX YEAR 2016Business Income + Salary Income

SAMPLE COMPUTATION

SECOND SCHEDULE

PART – IEXEMPTIONS FROM TOTAL INCOME

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPART I- Any income chargeable under the head "Salary" received by a person (foreigner) engaged as an expert or technical, professional, scientific advisor or consultant or senior management staff by institutions of the Agha Khan Development Network - Clause (3)

-Any income chargeable under the head “Salary” received by a Pakistani seafarer,

- working on Pakistan flag vessels or - working on a foreign vessel - Clause (4)

-Any allowance or perquisite paid or allowed as such outside Pakistan by the Government to a citizen of Pakistan - Clause (5)

-Any pension received by a citizen of Pakistan from a former employer - Clause (8)

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPART IAny pension received /granted – (i) to a member of the Armed Forces of Pakistan or Federal Government or a Provincial Government; ii) to the families and dependents of public servants or members of the Armed Forces of Pakistan who die during service.- Clause (9)

-Any payment in the nature of commutation of pension- Clause (12)

-Any income representing any payment received by way of gratuity or commutation of pension- Clause (13)

-Any income derived by the families and dependents of the "Shaheeds" belonging to Pakistan Armed Forces- Clause (16)

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPART I-Any income derived by the families and dependents of the "Shaheeds" belonging to the Civil Armed Forces of Pakistan - Clause (17)

-Any sum representing encashment of leave preparatory to retirement. - Clause (19)

-Any payment from a provident fund to which the Provident Funds Act, 1925 (XIX of 1925) applies- Clause (22)

-The accumulated balance due and becoming payable to an employee participating in a recognized provident fund.- Clause (23)

- The accumulated balance upto[50]% received from the voluntary pension system - Clause (23A)

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPART I-The amounts received as monthly installment from an income payment plan invested out of the accumulated balance of an individual pension accounts - Clause (23B)

-Any withdrawal of accumulated balance from approved pension fund- Clause (23C)

-Any benevolent grant paid from the Benevolent Fund to the employees or members of their families- Clause (24)

-Any payment from an approved superannuation fund made on the death of a beneficiary- Clause (25)

-Any income of a person representing the sums received by him as a worker from out of the Workers Participation Fund - Clause (26)

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPART I-Any special allowance specially granted to meet expenses wholly and necessarily incurred in the performance of the duties of an office or employment of profit. - Clause (39)

-Any income of a newspaper employee representing Local Travelling Allowance- Clause (40)

-The perquisite represented free of rent paid to President of Pakistan, the Provincial Governors and the Chiefs of Staff, Pakistan Armed Forces- Clause (51)

-The free conveyance provided and the (entertainment) allowance granted to Provincial Governors, the Chiefs of Staff, Pakistan Armed Forces and the Corps Commanders - Clause (52)

-The f perquisites and allowances provided or granted by Government to the Ministers of the Federal Government. - Clause (53)

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPART I-The free or subsidized food provided by hotels and restaurants to its employees during duty hours; free or subsidized education provided by an educational institution to the children of its employees; free or subsidized medical treatment provided by a hospital or a clinic to its employees; and any other perquisite or benefit for which the employer does not have to bear any marginal cost, as notified by the Board. Clause (53A)

-The free of rent residence provided to a judge of the Supreme Court of Pakistan or of a judge of High Court.- Clause (55)

-The perquisites, benefits and allowances received by a Judge of Supreme Court of Pakistan and Judge of High Court, shall be exempt from tax. -Clause (56)

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPART I-Any income from voluntary contributions, house property and investments in securities of the Federal Government derived by the following,

- National Investment (Unit) Trust of Pakistan - Any Mutual Fund approved by the [Securities and Exchanges

commission of Pakistan] - - Sheikh Sultan Trust, Karachi. - Clause (57)

- Any income other than capital gain derived by any Mutual Fund, investment company, or a collective investment scheme [or a [REIT Scheme][or Private Equity and Venture Capital Fund or the National Investment (Unit) Trust of Pakistan- Clause (57(2))

-Any amount donated to the Prime Minister’s Special Fund for victims of terrorism - Clause (64A)

-Any amount donated to the Chief Minister’s (Punjab) Relief Fund for Internally Displaced Persons (IDPs) of NWFP - Clause (64B)

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPart I-Prime Minister’s Flood Relief Fund 2010 and Provincial Chief Ministers’ Relief Funds, for victims of flood 2010. - Clause (64 C)

-Any income derived from donations made by non-official or private sector sources in Pakistan to the Waqf for Research on Islamic History, Art and Culture- Clause (65)

- Income for any tax year commencing from the tax year 2003, derived from the Welfare Fund created under rule-26 of the Emigration Rules, 1979- Clause (65A)

-Any profit on debt payable to a non-resident person- Clause (72)

-Any profit on debt derived by Hub Power Company Limited- Clause (74)

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPART I-Any income of an agency of a foreign Government, a foreign national (company, firm or association of persons)- Clause (75)

-Any profit on debt derived from foreign currency accounts held with authorised banks- Clause (78)

-Any profit on debt derived from a rupee account held with a scheduled bank in Pakistan by a citizen of Pakistan residing abroad - Clause (79)

-Any income derived from a private foreign currency account held with an authorised bank in Pakistan, [or certificate of investment issued by investment banks] Clause (80)

-Any profit on debt payable by an industrial undertaking in Pakistan on certain conditions Clause (90)-Any income of a text-book board of a Province - Clause (91)

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPart I-Any income derived by any Board other than Pakistan Cricket Board for the purpose of sports. -Clause (98)

- Income derived by a Collective Investment Scheme or a REIT Scheme. - Clause (99)

-Profits and gains accruing to a person on sale of immovable property to a [REIT Scheme] upto thirtieth day of June, 2015- Clause (99A)

-Any income, not being income from trading activity, of a modaraba- Clause (100)

-Profits and gains derived between the first day of July, 2000 and the thirtieth day of June, [2024] both days inclusive, by a venture capital company and venture capital fund

Clause (101)-Income of a person as represents a subsidy granted to him by the Federal Government-

Clause (102A)

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPART I-Any distribution received by a taxpayer from a collective investment scheme-

Clause (103)-Any income derived from inter-corporate dividend within the group companies-

Clause (103A)-Any income derived by the Libyan Arab Foreign Investment Company being dividend of the Pak-Libya Holding Company.- Clause (104)

-Any income derived by the Government of Kingdom of Saudi Arabia being dividend of the Saudi-Pak Industrial and Agricultural Investment Company Limited.- Clause (105)

-Any income derived by Kuwait Foreign Trading Contracting and Investment Company or Kuwait Investment Authority being dividend of the Pak-Kuwait Investment Company in Pakistan.- Clause (105A)

-Any income received by a taxpayer from a corporate agricultural enterprise.

Clause (105B)

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPART I-Any income derived by any subsidiary of the Islamic Development Bank wholly owned by it and set up in Pakistan and engaged in owning and leasing of tankers.- Clause (107)

-Any income derived by the Islamic Development Bank from its operations in Pakistan in connection with its social and economic development activities.- Clause (107A)

-Any gain on transfer of a capital asset, being a membership right held by a member of an existing stock exchange.- Clause (110B)

-Any income chargeable under the head "capital gains" derived by a person from an industrial undertaking set up in Export Processing Zones- Clause (113)

-Any income derived by a person from plying of any vehicle registered in the territories of Azad Jammu and Kashmir.- Clause (114)

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPART I-Any income of a public sector university established sololy for educational purposes and not for the purposes of profit, with effect from the 1st day of July, 2013.]- Clause (117)

- Any income of a public sector university established sololy for educational purposes -

Clause (126) - Income derived by China Overseas Ports Holding Company Limited- Clause (126A) -Profit and gains derived by [Khalifa Coastal Refinery] - Clause (126B)

-Profits and gains derived by a taxpayer from an industrial undertaking set up in Larkano Industrial Estate-- Clause (126C)

-Profit and gains derived by a taxpayer from an industrial undertaking set up in the Gawadar- Clause (126D)

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPART I-Income derived by a zone enterprise as defined in the Special Economic Zones Act, 2012

Clause (126E)- Profits and gains derived for a period of five years from the date of start of commercial production by the following companies from the projects mentioned against each that have been declared ‘Pioneer Industry’ by Economic Coordination Committee of the Cabinet:-M/s. Astro Plastics (Pvt) Limited from their Biaxially Oriented Polyethylene Terephthalate (BOPET) Project; andM/s. Novatex Limited from their Biaxially Oriented Polyethylene Terephthalate (BOPET) Project.] - Clause (126G)

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPART I- Profits and gains derived by a taxpayer, from a fruit processing or preservation unit set up in Balochistan Province, Malakand Division, GilgitBaltistan and FATA- Clause (126H)

-Profits and gains derived by manufacturer of plant, machinery, equipment for generation of renewable energy from sources like solar and wind. Clause (126I)

-Profits and gains derived an industrial undertaking engaged in operating warehousing or cold chain facilities for storage of agriculture produce.- Clause (126J)

-Profits and gains derived by an industrial undertaking which is engaged in operating halal meat production.- Clause (126K)

-Profits and gains derived by a taxpayer, from industrial undertaking set up in Khyber Pukhtunkhwa & Baluchistan - Clause (126L)

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPART I-Profits and gains derived by a taxpayer from a transmission line project set up in Pakistan- Clause (126M)

- Profits and gains derived by a taxpayer from an industrial undertaking duly certified by PTA - Clause (126N)

-Any income of company registered under the Companies Ordinance 1984 (XLVII of 1984), and having its registered office in Pakistan, as is derived by it by way of royalty, commission or fees from a foreign enterprise- Clause (131)

-Profits and gains derived by a taxpayer from an electric power generation project. Clause (132)

-Profit and gains derived by Bosicor Oil Pakistan Limited- Clause (132A)

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPART I-Profits and gains derived by a taxpayer from a coal mining project in Sindh. Clause (132B)

-Income from exports of computer software or IT services or IT enabled services upto the period ending on 30th day of June, 2016. Clause (133)

-Any income derived by a non-resident from investment in OGDCL exchangeable bonds

Clause (135A)-Any income of a special purpose vehicle as defined in the Asset Backed Securitization Rules, 1999- Clause (136)

-The benefit represented by free provision to the employee of medical treatment or hospitalization- Clause (139a)

SECOND SCHEDULEEXEMPTIONS FROM TOTAL INCOMEPART I-Any medical allowance received by an employee not exceeding ten per cent of the basic salary- Clause (139b) -All payments on account of principal, interest, or fees received by the Overseas Private Investment Corporation (OPIC) - Clause (140)

-Profit and gains derived by LNG Terminal Operators and Terminal Owners- Clause (141)

- Income from social security contributions- Clause (142)

SECOND SCHEDULE

PART – IIREDUCTION IN TAX RATES

SECOND SCHEDULEREDUCTION IN TAX RATES PART II

-Any income of persons whose profits or gains from business are computed under the Fifth Schedule to this Ordinance as is derived from letting out to other similar persons any pipeline for the purpose of carriage of petroleum shall be charged to tax at the same rate as is applicable to such persons in accordance with the provisions of the said Schedule-Clause (2)

-The tax in respect of income from services rendered [and construction contracts]outside Pakistan shall be charged at the rate of one per cent of the gross receipts. Clause (3)

-The rate of tax in respect of payments [from] profit on debt payable to a non-resident person shall be 10% of the gross amount paid.- Clause (5A)

-The tax in respect of capital gains derived by a person from the sale of shares or assets by a private limited company to Private Equity and Venture Capital Fund shall be charged at the rate of ten per cent of such gains.] Clause (5B)


-In the case of a modaraba the rate of income tax shall be 25% of total income excluding such part of total income to which Division III of Part I of the First Schedule or section153 or section 154 applies.]- Clause (13C) -The rate of tax as specified in Division II of Part 1 of the First Schedule shall be reduced to 20% for a company setting up an industrial undertaking- Clause (14)

-The rate of tax shall be 0.15% under section 231A on cash withdrawal by an exchange company, - Clause 28B


-The rate of tax ,from distributors of cigarette and pharmaceutical products [and for large distribution houses shall be 1% of the gross amount of payments.] – Clause (24A)

-The tax on payments under the Compulsory Monetization of Transport Facility for Civil Servants in BS-20 to BS-22 (as reduced by deduction of driver’s salary) shall be charged at the rate of 5% as a separate block of income- Clause (27)

-The rate of tax under section 148 on import of hybrid cars shall be reduced as below:—

Engine Capacity Rate of reduction Upto 1200 cc 100%1201 to 1800 cc 50%1801 to 2500 cc 25%] – Clause 28A

SECOND SCHEDULE

PART – IIIREDUCTION IN TAX LIABILITY

SECOND SCHEDULEREDUCTION IN TAX LIABILITY PART IIIAny amount received as- (a) flying allowance by [ ]flight engineers, navigators of Pakistan Armed Forces, Pakistani Airlines or Civil Aviation Authority, Junior Commissioned Officers or other ranks of Pakistan Armed Forces; and (b) submarine allowance by the officers of the Pakistan Navy, shall be taxed @ 2.5% as a separate block of income [:] ] [Provided that the reduction under this clause shall be available to so much of the flying allowance or the submarine allowance as does not exceed an amount equal to the basic salary.] – Clause 1

SECOND SCHEDULEREDUCTION IN TAX LIABILITY Part III-Total allowances received by pilots of any Pakistani airlines shall be taxed at a rate of 7.5%, provided that the reduction under this clause shall be available to so much of the allowances as exceeds an amount equal to the basic pay.] Clause (1AA)

- The tax payable by a full time teacher or a researcher, employed in a non profit education or research institution duly recognized by Higher Education Commission, a Board of Education or a University recognized by the Higher Education Commission, including government training and research institution, shall be reduced by an amount equal to [40]% of tax payable on his income from salary.] – Clause(1 (2))

SECOND SCHEDULEREDUCTION IN TAX LIABILITY Part III-The amount of tax payable, in a year in which the rupee is revalued or devalued, by a taxpayer whose profits or gains are computed in accordance with the rules contained in the Fifth Schedule to this Ordinance and who had entered with the Government into an agreement which provides for such reduction, shall be reduced to the amount that would be payable in the absence of the revaluation or devaluation of the rupee.- Clause (2) - In respect of old and used automotive vehicles, tax under section 148 shall not exceed the amount specified in Notification No. S.R.O. 577(I)/2005, dated the 6th June, 2005.]- Clause (4)

- The tax payable under clause (c) of sub-section (1) of section 39, in respect of any amount paid as yield or profit on investment in Bahbood Savings Certificate or Pensioners Benefit Account shall not exceed 10% of such profit.] – Clause (6)

SECOND SCHEDULE

PART – IVEXEMPTION FROM SPECIFIC PROVISIONS

SECOND SCHEDULEEXEMPTION FROM SPECIFIC PROVISIONS PART IV-In the case of losses referred to in section 57 in respect of an industrial undertaking set up in an area declared by the Federal Government to be a "Zone" within the meaning of Export Processing Zones Authority Ordinance, 1980 (IV of 1980), the period of six [tax years] specified in the said section shall not apply. – Clause (2)

-The provisions of clause (b) of [component C of the formula contained in] sub-section (2) of section 61 shall not apply in case of donations made to Agha Khan Hospital and Medical College, Karachi:- Clause 3

SECOND SCHEDULEEXEMPTION FROM SPECIFIC PROVISIONS PART IVThe provisions of section 111 regarding un-explained income or assets shall not apply in respect of, — (i) any amount of foreign exchange deposited in a private Foreign Currency account held with an authorized bank in Pakistan in accordance with the Foreign Currency Accounts Scheme introduced by the State Bank of Pakistan:

Provided that the exemption clause shall not be available in respect of any incremental deposits made on or after the 16th day of December, 1999 in such accounts held by a resident person or in respect of any amount deposited in accounts opened on or after the said date by such person.

(ii) any amount invested in the acquisition of Three Years Foreign Currency Bearer Certificates issued under the Foreign Currency Bearer Certificates Rules, 1997.

(iii) rupees withdrawn or assets created out of such withdrawal in rupees from private foreign currency accounts, or encashment of Foreign Exchange Bearer Certificates, US Dollar Bearer Certificates and Foreign Currency Bearer Certificates.] – Clause (5)

SECOND SCHEDULEEXEMPTION FROM SPECIFIC PROVISIONS PART IVProvisions of clause (a) of sub-section (1) of section 153, shall not apply to steel melters, steel re-rollers, composite steel units, as a payer, in respect of purchase of scrap, provided that tax is collected in accordance with section 235B- Clause (9A)

Provided that steel melters, steel re-rollers and composite steel units may opt to pay tax in accordance with section 235B, for tax year 2012 and 2013, if tax liability for the said tax years is paid by the 30th day of June, 2014:

Provided further that where tax has been deducted under clause (a) of sub-section (1) of section 153 or paid under an order under section 161, it shall not be refundable.]

SECOND SCHEDULEEXEMPTION FROM SPECIFIC PROVISIONS PART IV-Provisions of clause (a) of sub-section (1) of section 153, shall not apply to ship breakers as recipient of payment: Provided that this clause shall only apply for ships imported after the 1st July 2014.] –

Clause (9AA)

TAX CREDITSECTION 65

SECTION 100C

RULE 212 ~ 220

TAX CREDITMISCELLANEOUS PROVISIONS RELATING TO TAX CREDITS SECTION 65

-Tax credit to a person registered under the Sales Tax Act, 1990 -Section 65A

-Tax credit for investment - -Section 65B

-Tax credit for enlistment- Section 65C

-Tax credit for newly established industrial undertakings - Section 65D

-Tax credit for industrial undertakings established before the first day of July, 2011- Section 65E

TAX CREDIT


Tax @ 33% 346,477Rs. Tax Credit U/s. 65A 2.5% 8,662 Balance Tax Payable 337,815

ABC TAX YEAR 2016Tax Credit U/s. 65A

TAX CREDIT


Tax @ 33% 346,477Rs. Tax Credit U/s. 65B 250,000 Balance Tax Payable 96,477

Investment in Plant & Machinery 2,500,000 Tax Credit U/s. 65B @10% 250,000

ABC TAX YEAR 2016Tax Credit U/s. 65B

TAX CREDIT


Tax @ 33% 346,477Rs. Tax Credit U/s. 65C @15% 51,972 Balance Tax Payable 294,505

ABC TAX YEAR 2016Tax Credit U/s. 65C

TAX CREDIT


Tax @ 33% 346,477Rs. Tax Credit U/s. 65D @100% 346,477 Balance Tax Payable -

ABC TAX YEAR 2016Tax Credit U/s. 65D

TAX CREDIT


Tax @ 33% 346,477Rs. Tax Credit U/s. 65E @100% 346,477 Balance Tax Payable -

ABC TAX YEAR 2016Tax Credit U/s. 65E

TAX CREDITTAX CREDIT FOR CERTAIN PERSONS SECTION 100C

The tax credit admissible shall be subject to fulfilling the following conditions;

a. Return has been filed;

b. Tax required to be deducted or collected has been deducted or collected and paid; and

c. Withholding tax statements for the immediately preceding tax year have been filed.


To whom available Nature of income exempts

A trust administered under a scheme approved by the federal Government in this behalf and established in Pakistan exclusively for the purposes of carrying out such activities as are for the benefit and welfare of – i. Ex-servicemen and serving personnel, including civilian employees of the Armed Forces, and their dependents; or ii. Ex-employees and serving personnel of the Federal Government or a Provincial Government and their dependents, where the said trust is administered by a committee nominated by the Federal Government or, as the case may be, a Provincial Government.

Donations, voluntary contributions, subscriptions, house property, investments in the securities of the Federal Government and so much of the income chargeable under the head “ Income fro business” as is expended in Pakistan for the purposes of carrying out welfare activities.



A trust or welfare institution or non-profit organization approved by Chief Commissioner of Income Tax

Donations, voluntary contributions, subscriptions, house property, investments in the securities of the Federal Government and so much of the income chargeable under the head “ Income fro business” as is expended in Pakistan for the purposes of carrying out welfare activities.

A university or other educational institution being run by a non-profit organization existing solely for educational purposes and not for purposes of profit

Any Income



Religious or charitable institution, excluding private religious trust which does not ensure for the benefit of the public

Any income derived from voluntary contributions applicable solely to religious or charitable purposes of the institution;

Trust or other legal obligations wholly, or in part only, for religious or charitable purposes

Income from investments in securities of the Federal Government, profit on debt from scheduled banks, grant received from Federal Government or Provincial Government or District Governments, foreign grants and house property.

NON PROFIT ORGANIZATION

Rule 211 to Rule 220B

NON PROFIT ORGANIZATION PROCEDURE FOR THE APPROVAL OF A NON-PROFIT

ORGANIZATION.RULE 211-Application For Approval For The Purposes Of Clause (36) Of Section 2

Of The Income Tax Ordinance, 2001-a duly attested copy of the constitution, memorandum and articles of association, rules and regulations or byelaws-a certified copy of the registered trust deed, in case of a Trust-a certified copy of certificate of registration in the case of an organisation registered any law in substitution thereof relating to the registration of welfare organisation as applicable-duly attested copies of the balance sheet and of revenue accounts-the names and addresses of the promoters, directors, trustees, president, secretary, treasurer, manager and other office bearers-a detailed report with regard to the performance of the organisation for achieving its aims and objects during the [preceding financial year

NON PROFIT ORGANIZATION

-Decision on application – Rule 212-Refusal to grant approval. – Rule 213-Validity of the approval- Rule 214-Finalisation of applications. –Rule 215-Power to withdraw approval. Rule 217-Appeal against a decision of Commissioner- Rule 218-Organisation granted approval before commencement of these rules –Rule 219-Relaxation of requirements or conditions. – Rule 220-Procedure for approval 2 [ ] for purpose of sub-clause (3) of clause (58) of Part I of the Second Schedule -Rule 220A-Approval and appointment of certification agencies- Rule 220B

DepreciationThird Schedule

THIRD SCHEDULEDEPRECIATION Part I

I. Building (all types). 10%II. Furniture (including fittings) and machinery and plant (not

otherwise specified), Motor vehicles (all types), ships, technical or professional books.

15%

III. Computer hardware including printer, monitor and allied items [,machinery and equipment used in manufacture of I.T. products], aircrafts and aero engines.

30%

IV. In case of mineral oil concerns the income of which is liable to be computed in accordance with the rules in Part-I of the Fifth Schedule.(a) Below ground installations(b) Offshore platform and production

installations.

100%20%]

[V. A ramp built to provide access to persons with disabilities not exceeding Rs.250,000 each.

100%]

THIRD SCHEDULEINITIAL ALLOWANCE AND FIRST YEAR ALLOWANCE Part IIThe rate of initial allowance under section 23 shall be [25]%[for plant and machinery and [15]% for buildings]. [(2) The rate of First Year Allowance under section 23A [and section 23B] shall be 90%.

Net Profit 3,049,350Rs.

First Year Allowance 2,250,000Rs. Taxable Income 799,350

Taxation @ 33% 263,786

Plant & Machinery 2,500,000 First Year Allowance 90% 2,250,000

ABC TAX YEAR 2016Tax Credit U/s. 65E

THIRD SCHEDULEPRE-COMMENCEMENT EXPENDITURE Part III

The rate of amortisation of pre-commencement expenditure under section 25 shall be 20%.

THIRD SCHEDULESET OFF OF LOSSES SECTION 56

1) Subject to sections 58 and 59, where a person sustains a loss for any tax year under any head of income specified in section 11, the person shall be entitled to have the amount of the loss set off against the person’s income, if any, chargeable to tax under any other head of income [except income under the head salary or income from property] for the year.

(2) Except as provided in this Part, where a person sustains a loss under a head of income for a tax year that cannot be set off under sub-section (1), the person shall not be permitted to carry the loss forward to the next tax year.

(3) Where,[in a tax year,]a person sustains a loss under the head “Income from Business” and a loss under another head of income, the loss under the head “Income from Business shall be set off last.

SET OFF OF LOSSES OF COMPANIES OPERATING HOTELs SECTION 56A

.— Subject to sections 56 and 57, where a company registered in Pakistan or Azad Jammu and Kashmir (AJ&K), operating hotels in Pakistan or AJ&K, sustains a loss in Pakistan or AJ&K for any tax year under the head “income from business” shall be entitled to have the amount of the loss set off against the company’s income in Pakistan or AJ&K, as the case may be, from the tax year 2007

NTR/FTR/MTR

NORMAL TAX REGIME/ FINAL TAX REGIME

Normal Tax Regime (NTR) calculated on the basis of net profit adjusted for tax deductibles

Final Tax Regime (FTR) previously known as presumptive tax regime (PTR) which is lesser than normal tax rate and is full and final payment in respect of those payment, these are imports, exports, royalties, dividends, supplies, services, etc.

INCOME SUBJECT TO SEPARATE CHARGE

-Dividend;

-Royalty of non-resident;

-Fee for technical services of non-resident;

-Shipping income of non-resident.

- Air transport income of non-resident

-Tax imposed is a final tax;-Not chargeable to tax under any head of income in computing the taxable income of the person-No deduction is allowed for any expenditure incurred in deriving such income-The amount of the such income is not reduced by

– Any deductible allowance; or

– The set off of any loss; -The final tax payable is not reduced by any tax credit allowed (foreign tax credit or tax credits on donations, investments etc.);

INCOME SUBJECT TO FINAL TAX

Transaction General Rule Exception -Import of goods

The tax collected at source at the time of import of goods is non-adjustable tax deducted at source and the income arising from import of goods subject to collection of tax at source is chargeable to tax, if not otherwise exempt, as income subject to final tax.

-Raw material, including edible oil and packing material, imported by an industrial undertaking for its own use-Plant, machinery, equipment and parts imported by an industrial undertaking for its own use;-Fertilizer imported by manufacturer of fertilizer;-Motor vehicles in CBU (completely build up unit) condition imported by manufacturer of motor vehicles-Any goods imported by large import houses subject to full filling the certain conditions


Transaction General Rule Exception -Profit on debt The tax deducted at

source at the time of payment of profit on debt is non-adjustable tax deducted at source and the income arising from profit on debt subject to deduction of tax at source is chargeable to tax, if not otherwise exempt, as income subject to final tax.

-Profit on debt received by a company,


Transaction General Rule Exception -Execution of contracts by non-residents-A contract or sub-contract under a construction, assembly or installation project in Pakistan, including a contract for the supply of supervisory activities in relation to such project; -Any other contract for construction or services rendered relating thereto; or -A contract for advertisement services rendered by T. V. Satellite Channels

Where the nonresident opts in for final tax, the tax deductible at source at the time of payment against execution of specified contracts by non-resident is a final tax The option for treating the tax deducted at source as final tax has be made in writing within three months from the commencement of the tax year and once such option is exercised it can not be revoked for three years.

-Where the non-resident does not opt in for final tax, in which case the tax deducted at source from payments received against execution of specified contracts by non-resident is an adjustable tax


Transaction General Rule Exception -Insurance or re-insurance premiums received by non-residents

the tax deductible at source at the time of payment of insurance or re-insurance premium to a nonresident is a final tax

-such amount which is taxable to a permanent establishment in Pakistan of a non-resident person in respect of which Commissioner has granted written approval. Such amount will be taxed as part of income of permanent establishment under respective head.


Transaction General Rule Exception -Any other amounts (profit on debt) received by a non-resident

The tax deducted at source at the time of payment of profit on debt, on debt instruments, Government securities including treasury bills and Pakistan Investment Bonds where the investments are exclusively made through a Special Rupee Convertible Account maintained with a Bank in Pakistan, to a non-resident not having a permanent establishment in Pakistan, is final Tax


Transaction General Rule Exception -Sale of goods the tax deducted at

source at the time of payment against sale of goods to a resident or a permanent establishment in Pakistan of non-resident is final Tax

-Sale of any goods by a public company listed on a stock exchange; -Sale of manufactured goods by a company being manufacturer of such goods, other than ginned cotton; and - Sale of iron and steel products by the manufacturer thereof


Transaction General Rule Exception -Execution of contracts

The tax deducted at source at the time of payment against execution of contracts to a resident or a permanent establishment in Pakistan of non-resident is final Tax

-Execution of contracts by a public company listed on a stock exchange


Transaction General Rule Exception -Services of stitching, dying, printing, embroidery, washing, sizing and weaving

The tax deducted at source at the time of payment against services of stitching, dying, printing, embroidery, washing, sizing and weaving to a resident or a permanent establishment in Pakistan of non-resident is final Tax


Transaction General Rule Exception -Media services by non-residents

The tax deducted at source at the time of payment against media services to a non-resident is nonadjustable tax deducted at source and the income arising from payments received against media services by non-resident is final Tax


Transaction General Rule Exception -Export realization (goods)-Export realization (indenting commission)-Indirect export realization

The tax deductible at source at the time of export realization against export is final Tax


Transaction General Rule Exception -Prizes and winnings

-Prize on a prize bond; - Prize or winnings from a raffle, lottery, quiz or crossword puzzle; -Prize offered by companies for promotion of sale; and -Fair market value of the prize or winnings if it is not paid in cash

The tax deductible at source at the time of payment of prizes and winnings is final Tax


Transaction General Rule Exception -Commission or discount on petroleum products

The tax deductible at source at the time of payment of commission or discount to petrol pump operators is final Tax


Transaction General Rule Exception -Brokerage and commission

The tax deductible at source at the time of payment of brokerage and commission is final Tax


Transaction General Rule Exception -Natural Gas Consumption (CNG Stations)

The tax collected at source at the time of payment of natural gas consumption bill by CNG Stations is final Tax

INCOME SUBJECT TO MINIMUM TAX

- Minimum tax on the income of certain persons – Section 113 -Minimum tax on builders.- Section 113A-Minimum tax on land developers- Section 113B

-The tax collected from a person under section 148 on the import of edible oil [and packing material] for a tax year shall be [minimum] tax

- Tax deductible for the rendering of or providing of services u/s. 153 shall be a minimum tax.

WWF /WPPF

WORKERS’ WELFARE FUNDSECTION 60A

A person shall be entitled to a deductible allowance for the amount of any Workers’ Welfare Fund paid by the person in tax year under Workers’ Welfare Fund Ordinance, 1971 (XXXVI of 1971)]

Every industrial establishment and all other establishments to which Shops and Establishments Ordinance 1968 is applicable, whose total annual income exceeds Rs. 500,000 in a year pay to the Workers Welfare Fund a sum of two percent (2%) of its total income as is assessable under the Ordinance.

WORKERS’ PARTICIPATION FUND.SECTION 60B

A person shall be entitled to a deductible allowance for the amount of any Workers’ Participation Fund paid by the person in a tax year in accordance with the provisions of the Companies Profit (Workers’ Participation) Act, 1968 (XII of 1968).]

According to Companies Profit (Workers’ Participation) Act, 1968 (XII of 1968).] every company is required to pay five percent (5%) of its profits to Worker’s Participation Fund every year

taxation presented by anwar kashif mumtaz partner saiduddin & co. advocate, taxation, management...

Documents

taxable incomerate

tax year

schedule rate of tax

schedule tax credit

ftrntrmtr wwfwppf slide

individuals aopspart

salaried individuals

losses depreciation