session 03 email

8/4/2019 Session 03 Email

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Session 3


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Agenda for Session 2

Heads of Income

Salary

Second Schedule

Sixth Schedule Recognized Provident Fund

Calculation of Taxable Income


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Recap

Session 1 - Taxation Importance and purpose of taxation Taxation laws in Pakistan Definitions Tax Years

Heads of Income Residential Status Scope of Tax Charge of Tax

Session 2 - Salary Tax on salary - receipt or accrual? Definition of salary Perquisites and their valuation Employee Share Scheme Second Schedule


4/20

Concept Check

1. Is income from property included in Salary?

2. Is pension of a Government employee exempt?

3. What is the taxability of leave encashment?

4. Is leave encashment paid to an employee of private establishmenttaxable?


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Concept Check

5. Is deputation pay exempt?

6. Is special pay exempt?

7. Is compensatory allowance of a Pakistani citizen recruited in PakMission abroad exempt?

8. Is overtime allowance exempt?

9. What is exemption limit for utilities?


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Concept Check

10. Is medical allowance exempt?

11. Is entertainment allowance exempt?

12. Is bonus income exempt?

13. Whether accommodation provided by the employer isexempt?


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Concept Check

14. What is the method of taxing the accommodation provided byemployer?

15. Is there any minimum limit for addition on account ofaccommodation provided by the employer?

16. What is exemption limit for conveyance allowance?

17. Is vehicle provided by employer for personal & business useexempt?


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Concept Check

18. Is a leased motor vehicle provided by employer forpersonal and business use exempt?

19. Whether motor vehicle provided by employer,exclusively for personal use, exempt?

20. Is leased motor vehicle provided by employer

exclusively for personal use exempt?

21. Whether teachers are entitled for rebate?


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Concept Check

22. Is gratuity received on retirement, under the scheme approved byCIT exempt?

23. Is commutation of pension paid to an employee of Federal/Provincial Government/Local Authority/Statutory Corporationtaxable?

24. Is childrens allowance paid to a Shaheeds family exempt?

25. Is accommodation provided to President of Pakistan taxable?


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Concept Check

26. Is accommodation provided to a judge of the SupremeCourt Pakistan or High Court exempt?

27. Whether medical/hospital reimbursement chargesexempt?

28. Is free conveyance provided to the Chiefs of Staff,

Pakistan Armed Forces taxable?

29. Is accumulated balance of Provident Fund exempt?


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Part I of Sixth Schedule

Recognized Provident Fund

Commissioner may accord recognition to a PF if certainrequirements are met. (Rule1 & 2)

That portion of the annual increase in any year to the balance at the

credit of an employee participating in a recognized provident fund asconsists of:

contributions made by the employer in excess of one-tenth of thesalary or Rs.100,000 whichever is low of the employee; and

interest credited on the balance to the credit of the employee in so

far as it exceeds one-third of the salary of the employee or suchamount as specified by FBR (16% now) shall be treated to havebeen received by the employee in that year and shall be included inhis total income for that year and shall be liable to income tax.(Rule.3)


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Residential Status

Determine the residential status of the following person forthe tax year ended June 30, 20X2.

Mr. Mubeen came to Pakistan for the first time on a specialassignment from his company on April 01, 20X1 and left the

country on September 30, 20X1.


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Residential Status


Mr. Rana, who had never travelled abroad in his life, got a jobin Canada. He went to Canada on December 29, 20X1 to

assume his responsibilities as a CFO. In June, 20X2 hiscompany sent him to India on a training workshop. On June30, 20X2 on his way back to Canada he had to stay inKarachi for a whole day in transit.


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Residential Status


Mr. Baber, a Federal Government Employee was posted tothe Pakistan mission in Geneva from July 01, 20X1 to June

30, 20X2.


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Residential Status


Mr. Francis, a sugar dealer in Brazil, came to Pakistan onJuly 31, 20X1. During his visit he stayed at Lahore for 60

days and spent the rest of the days in Karachi. He left thecountry on January 31, 20X2. Assume that the Commissionerhas granted him permission to use calendar year as a specialtax year.


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Calculate Taxable Income

Description Rupees

Taxable Salary 1,000,000

Taxable Income from Property 650,000

(Loss)/Taxable Income from Business (750,000)

Tax deducted by employer from salary 100,000

Income from Other Sources 35,000

Taxable Capital Gains 15,000


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C7A09



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C7A10



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Calculate Taxable Income under Salary


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