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Income Tax in Pakistan - An
Overview
Law relating to taxation of income in
Pakistan is affirmed in the Income Tax Ordinance, 2001 (the
Ordinance) and the rules frame there under viz. Income Tax Rules,
2002 (the Rules). The Ordinance is a Central order and is;
therefore, applicable to the whole of Pakistan .Under section 4 of
the Ordinance, income tax is compulsory for each tax year at
specific rates on every person who has taxable income for the year.
The tax payable is calculated by apply the rate(s) of tax to the
taxable income of the taxpayer for the year and any tax credit
permitted to the taxpayer for that year is deduct from that amount.
The following tax
credits are acceptable under Chapter 3 Part 10 of the Ordinance:
Charitable donations, investment in shares, retirement annuity
scheme and profit on debt.
Tax Year in Pakistan
Tax year is a
period of twelve months ending on 30th June and shall be denoted by
the calendar year in which the said date falls.
Taxable Income in Pakistan
It is the total income of a person for a tax year reduced by the
total of any deductible allowances, under the Ordinance, for the
year. A person is permitted to a deductible allowance for the amount
of any Zakat paid by the person in a tax year under the Zakat & Ushr
Ordinance, 1980.
Income Tax Forms
Section
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