Salary Income - Taxability
Tuesday, March 26, 2013
Taxability: Salary is taxable on "Receipt" basis.
Receipt: means if salary is
- actually received or
- made available to
- apply or contribute on behalf of the employee by any law or regulation
Question: Salary is taxable on Receipt basis. Is there any exception available in the Ordinance
Answer: Yes, Salary paid by private companies can be taxable on accrual basis;
Where, in any tax year, salary is paid by a private company to an employee of the company for services rendered by the employee in an earlier tax year and the salary has not been included in the employee’s salary chargeable to tax in that earlier year, the Commissioner may, if there are reasonable grounds to believe that payment of the salary was deferred, include the amount in the employee’s income under the head “Salary” in that earlier year
Where, in any tax year, salary is paid by a private company to an employee of the company for services rendered by the employee in an earlier tax year and the salary has not been included in the employee’s salary chargeable to tax in that earlier year, the Commissioner may, if there are reasonable grounds to believe that payment of the salary was deferred, include the amount in the employee’s income under the head “Salary” in that earlier year
Labels: Heads of Income, Salary income
posted @ 2:10 PM,
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Heads of Income, Total Income and Taxable Income
Sunday, March 24, 2013
Taxable income.- (Section - 9) means
The total income of the person
Less: deductible allowances (Zakat, WWF, WPPF).
Total Income.- (Section - 10) means
Sum of the person’s income under each of the heads of income for the year + Exempt Income
Heads of income.- (Section - 11) can be classified under the following heads, namely:–
(a) Salary;
(b) Income from Property;
(c) Income from Business;
(d) Capital Gains; and
(e) Income from Other Sources.
The total of the amounts derived by the person in that year that are chargeable to tax under the head as reduced by the total deductions to the person for the year under that head.
Where the total deductions allowed to a person for a tax year under a head of income exceed the total of the amounts derived by the person in that year that are chargeable to tax under that head, the person shall be treated as Sustaining a Loss for that head for that year of an amount equal to the excess.
All incomes, which are chargeable to tax under Income Tax Ordinance, 2001 may broadly be classified into the following two catogaries:
- Pakistan Source Income
- Foreign Source Income (that is not Pakistan Source income)
Status Pakistan source Income Foreign source Income Resident Taxable Taxable Non - Resident Taxable Non Taxable
Labels: Heads of Income, Taxable Income, Total Income
posted @ 10:17 AM,
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