Tuesday, April 28, 2009

Tax performa




TAX PERFORMA










Mr…………
Tax Year 2008
Tax Year Ended 30.6.2008
Residential Status: Resident
Computation of Tax Payable

Income From Salary (Section 12)
(MTS)

Total Exempt Taxable
Rs. Rs. Rs.
Basic Salary xxxxxx --------- Xxxxxx
Overseas Allowance xxxxxx --------- Xxxxxx
Dearness Allowance xxxxxx --------- Xxxxxx
Cost of living Alloawance xxxxxx --------- Xxxxxx
Bonus xxxxxx --------- Xxxxxx
Commission xxxxxx -------- Xxxxxx

Salary Xxxxx Xxxxxx

Accommodation:
House Rent Allowance (when only Allowance is given) Xxxxx -------- xxxxx
Rent Free Unfurnished/Furnished Accommodation
when Option is given
House Rent Allowance
OR.
45% or MTS/Basic Salary Whichever is Higher

Xxxxxxx
Wages of Watchmen, Gardner at house paid by employer Xxxxxxx
Salary of Mali & Chowkidar paid by employer Xxxxxxxx

Conveyance:
Conveyance Allowance Xxxxx --------- xxxxxxx

Conveyance provided by employer for private use
(Note:lease Payment or Lease installment must be ignored) 10% of Cost or Fair market value in case of lease
Conveyance is provided by employer partly for personal and for official use 5% of Cost or Fair market value in case of lease
Conveyance provided by employer for official use only -------- ---------- ----------

Conveyance owned and maintained by employee
And vehicle tax paid (ADJUSTMENT)
Car Allowance (owned by employee) Only car allowance is taxable

Medical Charges, Hospital Charges or Medical Allowance (according to terms of employment)
Receive Free Treatment/Reimbursement Totally Exempt

Medical Allowance 10% of Basic salary

Any other case

Entertainment :
Actual entertainment expenses on behalf of organization/reimbursed Totally exempt

Free or subsidized facility provided to an employee of hotle or restaurant during duty hours. Totally exempt
Any entertainment facility within premises Totally exempt
All remaining cases. Entertainment allowance etc. Totally taxable


Special Additional Allowance :
Govt. employees Totally exempt
Private org. employees Totally taxable

Utilities Allowance or Free utilities :
Gas, electricity allowance or Utility allowance
Gas, water, petrol, electricity Totally taxable
Telephone Bill/paid by employer Totally taxable
Loan to Employee:
In case of interest free loan 10% of loan will be taxable
At lower rate 10% - lower rate = remaining will be taxable
Special allowance :
Traveling Allowance etc. Totally exempt
Provident Fund:

Sr. Items Govt. Provident Fund Recognized Provident Fund Unrecognized Provident Fund
1. Employee’s Contribution Already included Already included Already included
2. Employer’s Contribution Not Taxable Exempt upto 10% of basic salary extra will be taxable Not Taxable
3. Interest Credited Not Taxable Exempt if rate of interest is 16% and amount is less than 1/3rd of basic salary
Extra will be taxable Not taxable
4. Receipt of accumulated balance Not Taxable Not Taxable Included to the extent of employer’s contribution and interest thereon

OTHER POINTS USED IN NUMERICAL:

Total Exempt Taxable
Rs. Rs. Rs.
Qualification pay xxxx ------ Totally taxable
Any membership fee of a club paid by employer
(Gymkhana Club) xxxx ------ Totally taxable
Special relief Allowance xxxx ------ Totally taxable
Senior post Allowance xxxx ------ Totally taxable
Leave encashment during service xxxx ------ Totally taxable
Adhoc relief xxxx ------- Totally taxable
Orderly allowance Xxxx ------ Totally taxable
Computer Allowance Xxxx ------ Totally taxable
Special pay Xxxx ------ Totally taxable
Ph.D. Allowance xxxxx ------- Totally taxable
Performance Award Xxxxx ------- Totally Taxable
Incentive Award xxxx -------- Totally Taxable
Life insurance paid by employer Xxxx ------ Totally taxable
Life insurance paid by employee xxxx xxxxx --------
Salary of Mali & Chowkidar paid by employer Xxxx ------ Totally taxable
Efficiency honorarium Xxxx ------ Totally taxable
Domestic servant salary provided by employer Xxxx ------ Totally taxable
Overtime payment Xxxx ------ Totally taxable
Leave Encashment preparatory to retirement
(govt. Employee Exempt) Xxxx ------ Totally taxable
Lunch facility
(If subsidized lunch facility is given) (Exempt) Totally taxable
Telephone bill reimbursed by employer Xxxx Totally Taxable
Fee for refresher course paid by employer (for management) Xxxx Exempt -------------
Paper setting remuneration –actual expenses ----- ---- Remaining taxable
Free children education facility (In employer’s institution) xxxx exempt --------
Fixed education Allowance for children xxxx ----- Totally taxable
Project Allowance xxxx ----- Totally taxable
Rent ceiling paid by employer Xxxx ----- Totally taxable
(restricted to 15% of salary)
Gratuity received from employer
Approved by C.B.R (CIT) Xxxx Exempt upto Rs. 2,00,000 Other will be taxable
Not approved by C.B.R (CIT) 50% of gratuity OR
Rs. 75,000 whichever is less Other will be taxable
Pay in lieu of leave Xxxx ----- Totally taxable
Annual Leave fair assistance
(If traveled in Pakistan) Totally exempt
Leave fair Assistance (outside Pakistan) Xxxx ----- Totally Taxable

Free return ticket (Foreign) only ticket
Once in 2 years Xxx Totally exempt
But if other expenses/hotel expenses paid by employer Xxx ---- Totally taxable
Cash award granted by President of Pakistan Xxx Totally exempt -----------
Repair of refrigerator Xxx Totally exempt -----------
Repair of furniture Xxx Totally exempt -----------
Re-imbursement of internet usage (office use only) Xxx Totally exempt -----------
Free transport facility provider by transport company
If company’s business is not transport then taxable Xxx Totally exempt -----------

Conveyance Expenditures
(leasing rentals paid by employer) Xxx Totally exempt --------
Part time chowkidar Xxx ------ Totally taxable
Free lodging and boarding facility provided by a hotel Xxx Totally exempt ------------
Insurance Money received on maturity xxxxx Totally exempt -------------
Reimbursement of water and electricity Totally taxable

Income From Property (Section 15)

Total Exempt Taxable
Rent received or receivable xxxxx ----- --------
+ tax deducted at source (if any) Adjustment xxxxx ----- --------
Forfeited amount of token money xxxxx ----- ---------

Unadjustable Advance Received by Owner
If New Tenant is coming:
1/10th of the amount received xxxxx ----- ----------
If New Tenant is coming & old is going:
New Advance – Old Advance = xxxx/10 xxxxx ----- -----------

Amount of Repair paid by Tennant
Or Tennant bear cost of repairs
Actual amount of rent x ¼ xxxxx ----- -----------

Rent Chargeable to tax (Adjustmentl) xxxxx ----- No effect
(Note: Rent chargeable to tax is to be taxed under separate block of Income at the rate of 5% w.e.f. 1st July 2006)
Note: (If only net income from property is given then directly taxable under separate block)

Income From Business (Section 18)


Royalities on professional books xxxxx ----- Totally taxable
Income from fish catching business xxxxx ----- Totally taxable
Income from poultry farming xxxxx ----- Totally taxable
Income from business xxxxx ----- Totally taxable

Income From Capital Gain (Section 37)


Gain on sale of share of public company Exempt upto 2010 ---------
Gain on sale of shares of private company
(with in 12 months)
Gain –Capital loss (if any) = Net capital gain xxxxx ------- Net gain is taxable

(After in 12 months)
Gain –Capital loss (if any) = Net capital gain xxxxx 25% of gain is exempt Remaining will be taxable
Gain on sale of NIT units
Sales – cost = net gain xxxx Totally exempt up to June 2010 ------------------

Total Capital Gain xxxxxxxxxxx


Income From Other Sources (Section 39)


Interest on security
Interest on security (Gross) xxxxx ----- Totally taxable
(if net interest is given (Net x 100/90) (Adjustment) xxxxx ----- Totally taxable

Professional writer’s income xxxxx ----- Totally taxable
Income of Non-Professional writer xxxxx ----- Totally taxable
Remuneration from literary work xxxxx ----- Totally taxable
Rent of Furniture and Fittings xxxxx ----- Totally taxable
Insurance money received at maturity xxxxx Totally Exempt -----------------
Amount received from abroad xxxxx Totally Exempt -----------------
Gift from mother xxxxx Totally Exempt -----------------
Profit on sale of encashment of Defense saving certificate (sale - cost = profit) xxxxx Profit is taxable
Share from associaton of person (Adjustment) xxxxx ----- Totally taxable
Profit on sale of inherited house Xxxxx Totally exempt --------
Golden Hand Shake received during year
If received with on one year Xxxxx ----- Totally taxable
If received after two years or three years (Adjustment) No effect No effect No effect
income from foreign (U.K./U.S.A) (Adjustment) xxxxx ----- Totally taxable
Agricultural Income Xxxxx Totally Exempt -----------------

Total Income ------ --------- xxxxxxxxxxx

Less: Deductions Allowed Before Tax
Zakat paid under zakat ordinance Xxxx
Payment to worker’s welfare fund Xxxx


Total deductions Xxxx xxxxxxxxxxx

Taxable Income XXXXXXX

Note: if salary income is more than 50% of Taxable income, the person will be treated as salaried
Computation of Tax
There are two types of Tax rates
(1). In case of salaried men no tax payable shall be charged if the taxable income is up to Rs. 150000
(2) In case of salaried women not tax payable shall be charged if the taxable income is up to Rs. 200,000


S. No. Taxable Income Rate S. No.
1 Upto Rs. 1,50,000 0% 1
2 Rs. 1,50,001 to Rs. 2,00,000 0.25% 2
3 Rs. 2,00,001 to Rs. 2,50,000 0.50% 3
4 Rs. 2,50,001 to Rs. 3,00,000 0.75% 4
5 Rs. 3,00,001 to Rs. 3,50,000 1.50% 5
6 Rs. 3,50,001 to Rs. 4,00,000 2.50% 6
7 Rs. 4,00,001 to Rs. 5,00,000 3.50% 7
8 Rs. 5,00,001 to Rs. 6,00,000 4.50% 8
9 Rs. 6,00,001 to Rs. 7,00,000 6.00% 9
10 Rs. 7,00,001 to Rs. 8,50,000 7.50% 10
11 Rs. 8,50,001 to Rs. 9,50,000 9.00% 11
12 Rs. 9,50,001 to Rs. 10,50,000 10.00% 12
13 Rs. 10,50,001 to Rs. 12,00,000 11.00% 13
14 Rs. 12,00,001 to Rs. 15,00,000 12.50% 14
15 Rs. 15,00,001 to Rs. 17,00,000 14.00% 15
16 Rs. 17,00,001 to Rs. 20,00,000 15.00% 16
17 Rs. 20,00,001 to Rs. 31,50,000 16.00% 17
18 Rs. 31,50,001 to Rs. 37,00,000 17.50% 18
19 Rs. 37,00,001 to Rs. 44,50,000 18.50% 19
20 Rs. 44,50,001 to Rs. 84,00,000 19.00% 20
21 Exceeding Rs. 84,00,000 20.00% 21

Gross Tax (Tax Liability) [after application of the above Table of tax slabs]
Less:
Tax concession allowed for full-time Teacher or researcher (75% of tax payable)
Less:
Tax rebate allowed for Senior citizen (50% of tax payable)
60 years of age or above
earning income upto Rs. 4,00,000

Gross Tax Payable xxxxx

Less:
AVERAGE RELIEF
Amount admissible for Average relief
Formula:-


GROSS TAX
TAXABLE INCOME

The following amounts are admissible
Donation for charitable purpose
(can be educational board, university, Hospital , any relief fund and non-profit organizations.) (all should be govt. approved)
i. Maximum upto 30% of taxable income
ii. The amount must be paid in form of cross cheque or in kind
Investment in Share (to original allottee)
Restricted to 10% of taxable income
Or Rs. 3,00,000 whichever is less
If he sells or transfers these shares within one year of purchase, no relief will be given
Contribution to approved Pension Fund
The person should possess a valid NTN.
Restricted to 20% of taxable income
Or Rs. 5,00,000 whichever is less
Note: if the person joined this scheme at the age of 41 years or above the limit of 20% as mentioned above will be enhanced by 2% for each year above 40.
Profit on Debt or Markup on Housing Finance Scheme
Restricted to 40% of Taxable income
Or Rs. 5,00,000 whichever is less



Less:
Income Tax credit on Share income from Association of Person (Adjustment)
Formula:-


NET TAX
TAXABLE INCOME

After formula the answer will be: -

Pakistan Income Tax on Taxable Income (including Foreign income)

Less:
(Adjustment) Foreign Tax Credit
1. Foreign Income tax paid
OR
2. Formula: -

Pakistan income tax on taxable income including Foreign income
Taxable Income including Foreign income
Whichever is less

Add:
Golden hand shake (Adjustment) Separate average rate of tax
Note: if term of employment is more than 1 year e.g., 2 years or 3years, in this case rate of preceding 2 or 3 years will be given in question to calculate the average rate, and this average rate will be applied to the amount.

Add:
Taxes on separate block of income, separate rates are given.


Block of Income Rate
1 Dividend income 10% of such income
2 Royalty payment to non-resident 15% of payment
3 Income by way of prize or prize bonds 10% of such prize
4 Income representing winning from a raffle, lottery or cross word puzzle 20% of such winning
5 Flying allowance received from Pakistan Armed Forces, PIA or Civil Aviation Authority 2.5% of such allowance
6 Profit on debt other than received on government securities
Example: yield on NSC
Yield on DSC 10% of such income
7 Income from property (Adjustment) 5% of fair market value
8 Remuneration for examiner ship fee 6% of the fee
Total Tax xxxxxxx
Less: Tax deduction at source
Tax on separate block of income (if added above)except property
Deducted at source in salary (if given in question)
Vehicle Tax paid (Adjustment) if given is question along with conveyance.
Property tax deducted at source (Adjustment) (if added above)
Tax deducted at source in income from other sources under interest on security (gross-net = tax deducted at source)
Tax on golden hand shake (if added above)
Tax on cheque transfer (Rs. 25000 or exceeding) (0.2%)

ANSWER

IMPORTANT NOTE {no effect of these \items}
Agricultural income is totally exempt from tax irrespective of the amount
If only conveyance expenditure is given then there will be no treatment because conveyance facility is cost based.
Annual lease rent/payments have no effect ( if given)
There is no concession for salaried person in this year
There is allowable deduction for interest on mortgage as the loan is used other than property purpose
There is no deduction in respect of donation to Baitul Mall
Capital loss can adjusted only against capital gain from the same source, otherwise there no effect of such loss
Profit on PLS Account will treated as dividend from PLS and will be treated as income of separate block of income
There is no concession in respect of education expenses of children and book purchased
There is no average relief on personal legal expenditures.
Facility of fee services to the children of salaried person is exempt if he is working in the organization of same services.

2 comments:

  1. Can you please give reference how a subsidized lunch is exempt from tax, while clause 53A of the first schedule says some thing different. Will be obliged if replied. Regards

    ReplyDelete
  2. Thanks dear ........... i really need above tax PERFORMA and information and now i can get here its really authentic and good so again thanks and keep it....

    ReplyDelete