Tax Calculator Pakistan 2018 - 2019 (Updated)

Salaried Individual can calculate tax liability by checking tax calculator on google. 

The system will generate your ta liability against which you should file your tax chalan.

INSTRUCTIONS FOR FILING SALES TAX RETURN

ANNEXURE-A

System auto calculate this value ( Domestic purchase)

Purchase from Un registered person should be recorded.

ANNEXURE B

This value is taken automatic by system by linking GD's appearing in Custom site.

ANNEXURE C

SALES sale ( in Excel format) should be attached.

ANNEXURE -D

If any export is made.

ANNEXURE-H

Write down stock detail ( if refund is claimed).

   HOW TO FILE FORM 181 FOR NEWLY TAXPAYERS REGISTRATION

There are six column in FORM 181 Which are required to be filed by new person for registration

in FBR.

01- PERSONAL

In which you are required to provide NIC detail , name , typer ( Individual, business individual) , Registered address, birth date, email and Cell number.

02-PROPERTY

 IN PROPERTY COLUMN you are required to provide detail of Commercial property as well as Residential Property detail.

03-BUSINESS

IN business column write the business name and and date of business acquisition.

04- LINK COLUMN

In this column you may leave it blank.

05-ATTACHMENT

IN this column you may leave it blank.

06- BANK ACCOUNT

In this column you may provide Bank Account detail.

PROFIT ON DEBT ( EXEMPT INCOME)

Any Profit received by a NON Resident person on a security issued by a resident person shall be exempt from TAX under this Ordinance where

- the persons are not associate

-the security was issued by the resident person outside Pakistan for the purpose of raising a loan Outside Pakistan for use in a business carried on in Pakistan

- The Profit was paid outside Pakistan

- The Security is approved by FBR 

EXEMPTIONS AND TAX CONCESSIONS

Following Income are exempt from tax

- Agriculture Income

- Diplomatic and UN exemptions

- Exemption under International Agreement

-Presidents honor

-Profit on debt ( Certain Conditions)

-Scholarships

- Support payment under agreement to live apart

-Government Income

-Foreign Source Income of Short Term Resident Individual

- Foreign Source Income of Returning Expatriates

-Exemption and Tax Concession in II Schedule

-Exemptions and tax provisions in in other Laws

Those all income are exempt from tax subject to certain conditions.

 WEALTH STAEMENT BY NON RESIDENT PERSON


As per Section 116 resident person is required to file wealth statement .However non resident person filing return need not file wealth statement.

TAX treatment of foreign source income of resident individual

Foreign source income is exempt in pakistan if resident person has paid tax in foreign. However if resident person has to pay tax in Pakistan then he will get tax credit.

     PERSONS NOT REQUIRED TO FURNISH A RETURN OF INCOME

01- A-Widow
02- Orphan below age of 25 years
03- A disabled persons
04-In case of Ownership of Immovable property , a NON RESIDENT PERSON
05- Any Person who is not obliged to furnish return because of his income is subject to FINAL TAXATION U/S
05,6,7,148,151,152, SUB SECTION (3) OF SECTION 153, SECTION 154, 156, AND 156 A , SUB SECTION ( 3) OF SECTION 233 OR SUB SECTION (3) OF SECTION 234 A SHALL FURNISH TO COMMISSIONER STATEMENT RELATING TO INCOME FOR TAX YEAR

WAIVER OF PENALTY FOR LATE FILING RETURN AND AUDIT CLOSURE UNDER SECTION 214-D BY GOVERNMENT

The federal Revenue Minister said today that Government will close audit of salaried person and waive of fine required under section 182 of INCOME TAX ORDINANCE 2001 amounting Rs. 20,000.

     EXEMPTION FROM PENALTY AND DEFAULT                       SURCHARGE  IN  INCOME TAX ORDINANCE  2001

       Exemption from Penalty U/S 183 is available provided that

The Federal Government or Board may by notification / order published in Official Gazette for reasons to be recorded in writing exempt any person of class of persons from payment of total or partial penalty or default surcharge. subject to conditions / limitations as may be specified.

Last date of Filing Return

FBR asked people to submit their return within due date.In a statement they said that FBR is not harassing people.e s

Taxpayers can closed audit by paying penalty or higher tax.

One Person should file consecutive two years return to be shown in Active Taxpayers List.

           ASSESSMENTS  ( UNDER SECTION 120)

When a taxpayer has furnished a complete income tax return ( Other than revised)

-The Commissioner shall be taken to have made an assessment of taxable income for that tax year and tax due thereon.

- The return shall be taken for all purose of this Ordinance to be an assessment order issued to taxpayer by the Commissioner on the day the return filed/ furnished.

- Where a return furnished is not complete , the Commissioner shall issue a notice to taxpayers informing him about the deficiencies and directing him to provide such information.

- The return shall be considered invalid return as if it had not been furnished ( When a taxpayer fails to fully comply , by the due date.

FILING OF INCOME TAX RETURN as INCOME TAX RETURN 2001

An Individual may have more than one source of income

-ADJUSTABLE INCOME ( IE .Salary Income ( That is adjustable)
-Presumptive income / FTR that is final and any tax deducted on that source of income at the time of receipt is final tax. However this amount should be shown in return filing.
- PROPERTY INCOME that is calculated as per Tax Slab.
- Business Income that is also taxable as per Slab Rate.
- Income from Other Sources - Final tax

Detail will be discussed in late due to shortage of time.

  EXEMPT INCOME OF RETURNING EXPATRIATE

A person ( Individual) who remains abroad four years and return to Pakistan 

His foreign source income shall be exempt in the year in which 

- He becomes resident

- and in the subsequent tax year

Where a Pakistan national leaves Pakistan during tax year his SALARY Income shall be exempt.

Above income is exempt as per SECTION 51 OF INCOME TAX ORDINANCE 2001.

  PREPARATION OF AUDIT NOTICE REPLY FOR SALARIED PERSONS ONLY IN FBR

First of all You should read the notice issued by Departments and read the relevant Section under Which Notice is issued. The Notice usually required the following information.

 01. Bank Statement

02. Books of accounts maintained by taxpayers.

03. Detail of expense stated in your return

04. Detail of asset appearing in your Wealth Statement

05. Detail of Liability appearing in Wealth Statement

06. Tax deducted on your salary.

and any other information that they consider necessary.

In response to your notice reply , You should provide the

Salary Sheet for the whole year.

tax deducted by emplyer ( WHT .Certificate) 

Evidence of increase in asset ( It may through gift -If it is gift  it should be through banking channel)

and Evidence of liability ( it may be loan  etc.)

However You should consult your tax consultant before submitting your reply.

Taxpayers offered easy ways to close audit proceedings for late filing

Nausheen Javaid Amjad, Member Taxpayers’ Audit FBR, has announced that all those taxpayers automatically selected for audit u/s 214D due to late filing of returns for Tax Year 2015, 2016 and 2017, have now the opportunity for automatic closure of audit u/s 214E by paying the penalty or higher tax than previously filed return, whichever is applicable under the law.

She made this statement while addressing separate gatherings of taxpayers, tax lawyers and tax practitioners at Lahore and Faisalabad. Both the events were attended by among others by President of All Pakistan Tax Bar Association Mr. Abdul Qadir Memon, Presidents and Vice-Presidents of Lahore and Faisalabad Tax Bar Associations as well as a large number of lawyers, chartered accounts and tax practitioners.

Ms Nausheen Javaid Amjadexplained that the salaried persons or those whose income falls under the category of FTR/PTR have to pay penalty only to close their audits. However, taxpayers whose income falls under any other head of income, have to apply for revision of returns u/s 214E in Iris system. A tab has been made available in the system for this task. The relevant Commissioner will approve the said request within three days or the system will automatically allow revision on the fourth day. The system will automatically calculate the tax due in both categories. Once the payment is made and relevant CPR is attached and submitted, the system will automatically close the audit proceedings. The facility for availing automatic closure of audit u/s 214E is available till 31 Dec 2018 and approximately 1,022,000 taxpayers will benefit from it.

Member Taxpayers’ Audit further said that Section 214D under which late filers were automatically selected for audit, has been deleted from the Income Tax Ordinance 2001 in the Finance Act 2018 due to undue hardships faced by new taxpayers and to facilitate the process of Broadening of Tax Base.

The above statement is copied from FBR WEBSITE SO AS TO UNDERSTAND THE TAX CLOSURE BY READERS.

    AUDIT NOTICE RECEIVED U/ S 214 D

The Government has issued mini budget according to which Section 214 D of Income Tax Ordinance has been closed / end / abate . Now audit cases will be dealt as per Section 214 E has been proposed.

Taxpayer has revised return voluntarily by 31 Ist December 2018. by paying 25%  higher tax than the tax paid with the return on the basis of taxable income or where no tax is payable 2% of turnover payable and where no turn over is declared PENALTY under Section 182 has been paid.

     CLOSURE OF AUDIT UNDER INCOME TAX ORDINANCE

    There are THREE situations in which audit can be closed.


01 SALARY/ FTR / NIL RETURN CASES FILED
  PAY Penalty by 31 December 2018.

02.LOSS OR BELOW TAXABLE INCOME

        FILE REVISED RETURN BY 31 DECEMBER 2018 BY 2 % OF TURNOVER

03. CASES WITH TAXABLE INCOME

FILE REVISED RETURN BY 31 DECEMBER 2018 BY 25 % THAN THE TAX PAID WITH THE RETURN ON THE BASIS OF TAXABLE INCOME

Minimum Penalty paid in case of late filing is Rs.20,000/.

TAXPAYERS is required to give application to Commissioner for closure of audit and he is bound to close it within THREE days. If he does not close the audit then IT Wings of FBR WILL automatically proceeds to close audit on FOURHT day.

     AUDIT UNDER SECTION 177 ( INCOME TAX                     ORDINANCE 2001)

The Commissioner may call for any record or documents including books of accounts  under this Ordinance ( Property documents, vehicles ,assets , or any other) for conducting audit  of the income tax affairs of the person.The Commissioner also have power to access data kept by the person.

 The Commissioner may, after recording reasons in writing call for the record or documents       required from taxpayer and the reasons shall be communicated to taxpayer for requiring record.

 Provided that Commissioner shall call for record of the taxpayers after expiry of the six years from the end of tax year to which it relates. 

  After obtaining necessary record / reply where necessary record is not maintained  , The Commissioner shall conduct an audit of income tax affairs , enquiry into expenditure ,assets and liabilities and 

any other information which he deem necessary.

After completion of audit Commissioner may ( if consider necessary)  amend the assessment U/S ( Sub Section 1 or) of Section 122 as the case may be.

The Board may also appoint a Firm of Chartered Accountant ,a Firm of Cost and Management Accountants to conduct audit of income tax affairs.

IF A PERSON FAILS TO PRODUCE RECORD REQUIRED FOR AUDIT  , The Commissioner 

may make best judgement assessment U/S 121.

 You can also contact me if you have any query / audit related issue.

               COMMERCIAL IMPORTER RETURN

              COMMERCIAL IMPORTER RETURN IS FILED 

           

             U/S 115 ( 4)

           

            01 You should file adjustable tax in adjustable column. e.g.

               

               

               WHT. ON CASH WITHDRAWL

               WHT , O MOTOR VEHICLE

               WHT. ON ELECTRICITY BILLS

                WHT. ON CELL PHONE / TELEPHONE

                WHILE FINAL /MINIMUM TAX COLUMN 

                 You should read 

                final income 

             e.g 

                  dividend

                  Foreign indenting commission

                  capital gain on security

                  Export proceeds U/S 154 ( 3)

                   Royalty / Fee for Technical Services to a Non-Resident covered under ADTT

                    Profit on debt U/S 152 ( 2)       

                  

                  

               

      

    

                   

                                                    PROFIT ON DEBT U/S 151

Every person paying yield on account ,deposit or certificate under National Saving Scheme or Post Office saving Account,

financial institution ,

Federal ,Provincial Government pays to any person

The payer of the interest/ yield/ profit shall deduct tax at rate specified in First Schedule at the gross amount as reduced by amount of Zakat.

The amount of tax deducted shall be final tax except ( adjustable) 

01 if taxpayer is company

02. profit on debt is taxable U/S 7 B.

APPLICATION / WITHHOLDING STATEMENT  FOR WITHHELD TAX IN IRIS FOR FILING

• claration
• Tax Amnesty
• Rectification
• Refund
• Withholding / Advance Tax

  Forms 147 (Statement of Advance Tax) 165(1) (Statement of withholding taxes filed voluntarily) 149 (Annual Statement of withholding taxes filed voluntarily) 165(2A) (Statement of withholding taxes filed after revision)

  Applications 122B(1) (Application for revision of Exemption Order) 165(4) (Application for extension in time for filing of Statement of withholding taxes) 152(2AA) (Application for reduced rate of withholding on payments to Non-Resident) 7C Application under Rule 13V of SRO 787(1)/2016 by builders for issuance of schedule of advance tax installments 152(3) (Application for reduced rate of withholding on payments to Non-Resident) 7D Application under Rule 13ZC of SRO 787(1)/2016 by developers for issuance of schedule of advance tax installments 152(4A) (Application for reduced rate of withholding on payments to Non-Resident) 152(5) (Application for reduced rate of withholding on payments to Non-Resident) 153(4) (Application for reduced rate of withholding on Supplies / Services / Contracts) (FOR GENERIC EXEMPTION)

  APPLications 159(1) / 148 (Application for reduced rate of withholding on Import) (FOR QUOTA ALLOCATION RAW MATERIAL) 159(1) / 148 (Application for reduced rate of withholding on Import) (FOR IMPORTS ADDITION RAW MATERIAL) 159(1) / 148 (Application for reduced rate of withholding on Import) (FOR IMPORTS ADDITION MACHINERY) 159(1) / 150 (Application for reduced rate of withholding on Dividend) 159(1) / 150A (Application for reduced rate of withholding u/s 150A) 159(1) / 151 (Application for reduced rate of withholding on Profit on Debt) 159(1) / 152 (Application for reduced rate of withholding on payments to Non-Resident)

  Applications 159(1) / 155 (Application for reduced rate of withholding on Rent) 159(1) / 156 (Application for reduced rate of withholding on Prizes / Winnings) 159(1) / 156A (Application for reduced rate of withholding on Petroleum Products) 159(1) / 156B (Application for reduced rate of withholding on Withdrawal from Pension Fund) 159(1) / 231A (Application for reduced rate of withholding on Cash Withdrawal from Bank)

HOW TO CREATE DELETE CPR / CHALLAN /PSID ON FBR ( PAKISTAN) FOR TAX

DEAR VIEWERS / READER

Follow the following procedures to make payment in FBR

01. Go to EFBR website and write down User Id and Password in relevant tab

02.After log in go to  e-Payment ( click on create payment)

03. Select relevant payment (ie Sales tax , FED , Income Tax and tax on immovable property) and click on it

04. Select relevant tax year ie 2019

05. Select business branch that will be shown when you click it and select it.

06. In payment nature section ( select relevant nature ie Adjustable , Demanded income tax, Admitted income tax f , final tax  , misc. tax , wwf and wppf

07. Write down taxpayers detail ( Status Resident / Non resident) and select payment month.

08. Select relevant payment section ( that is relevant) and write down tax payers NTN and click on any tab.

09. System will open the data of relevant tax payers  ( Ie tax payers Business nature)

10. Write down taxable value and rate of tax and click on any tab.

11. Tax amount will be calculated by System

12.Click on add tab

13. In particulars of payment select relevant whether you will pay through Cash , Pay order, debit card and credit card.

14. After this all click on Create at the end of page and review your feeding data .If it is correct click on Confirm.

15. Select relevant city for payment and click on Print button .

16. Your challan / PSID is ready to submit in Bank.

EDIT / DELETE PSID IF ERRONEOUS 

In E - payment Section click on search payment select relevant PSID created that is erroneous and click on delete button and prepare new one that is required.

   E Services available on FBR


- Online Verification
Where we can verify Active taxpayer status
- NTN / Sales Tax Inquiry
- Black listed status of taxpayers
-Use IRIS ADX Services to file return
- Pay tax online using ATM (Income Tax, Sales Tax, FED and Customs duty.

There are also a number of other services that can be used using online FBR services.

CHANGE IN PASSWORD IF PERSONS/ USER NAME IN FBR IRIS PORTAL IS FORGOTTEN

Here is the procedures to be followed if a person forget his name

01. Go to IRIS FBR SITE

02. Write your registration number ( 13 digit ID Card number without any dash/ space.)

03.Write your email address in email column

04.Write the relevant service provider company (ie. Telenor, Ufone, Zong, Jazz ,Warid in Current Service Provider Column.

05. Write your cell number

06.Enter Captcha shown on the left side.

07 Click on the Submit button

After completion of above procedurs you will receive new password  use it and carry on your routine work.

In case you donot receive the password due to any reasons you may also 

Local RTO for password.

Hope to find the above information beneficial for you .

  REGISTRATION PROCEDURE FOR INDIVIDUAL , AOP AND COMPANY IN FBR FOR
 INCOME TAX ( GUIDELINES)

1. On-line registration is available only for: a. Individual and not for Association of Person or Company; b. Income Tax and not for Sales Tax; 2. Before starting registration, the Taxpayer must have: a. read User Guide; b. a computer, scanner and internet connection; c. a cell phone with SIM registered against his own CNIC; d. a personal email address belonging to him; e. scanned pdf files of: i. certificate of maintenance of personal bank account in his own name; ii. evidence of tenancy / ownership of business premises, if having a business; iii. paid utility bill of business premises not older than 3 months, if having a business. Registration at Facilitation Counters of Tax Houses 1. Registration at Facilitation Counters of Tax Houses is available for all: a. Individual, Association of Person and Company; b. Income Tax and Sales Tax; 2. For Registration of an Individual, the Individual must: a. personally go to any Facilitation Counter of any Tax House: b. take the following with him: i. Original ID.Card ii. Cell phone with SIM registered against his own ID.Card iii. Personal Email address belonging to him; iv. Bank Account maintenance certificate. v. Original evidence of tenancy / ownership of business premises, if having a business; vi. Original paid utility bill of business premises not older than 3 months, if having a business. 3. For Registration of an AOP, anyone of the Members / Partners must: a. personally go to any Facilitation Counter of any Tax House: b. take the following with him: i. Original partnership deed ii. Certificate of registration Form 32. iii. ID Card of all Members / Partners; iv. Original letter on letterhead of the AOP signed by all Members / Partners, authorizing anyone of the Members / Partners for Income / Sales Tax Registration; v. Cell phone with SIM registered against his own CNIC but not already registered with the FBR; vi. Email address belonging to the AOP; vii. Original certificate of maintenance of bank account in AOP’s name; viii. Original evidence of tenancy / ownership of business premises, if having a business; ix. Original paid utility bill of business premises not later than three  months, if having a business. 4. For Registration of a Company, the Principal Officer should : a. personally go to any Facilitation Counter of any Tax House: b. take the following with him: i. Incorporation Certificate of the Company; ii. ID Card  of all Directors; iii. Original letter on letterhead of the company signed by all Directors, verifying the Principal Officer and authorizing him for Income Tax / Sales Tax Registration; iv. Cell phone with SIM registered against his own CNIC but not already registered with the FBR; v. Email address belonging to the Company; vi. Original certificate of maintenance of bank account in Company’s name; vii. Original evidence of tenancy / ownership of business premises, if having a business; viii. Original paid utility bill business premises not later than three months, if having a business.

                  Section 122 of Income Tax Ordinance 2001 ( PAKISTAN INCOME TAX LAW)

Amendment of Assessment

The Commissioner may amend an assessment order treated as issued U/S 120 ( Return submitted deemed to be assessed) U/S 121 (Best judgement assessment) by making such alteration or addition as consider necessary.
The Commissioner cannot issue order after expiry of five years from the end of financial year
in which the Commissioner has issued or treated to have issued assessment order.
When a taxpayer furnishes a revised return U/S 114 ( 6 A)
The taxpayers revised return shall be taken to be amendment assessment on the day on which the revised return was furnished.
The Commissioner can amend assessment as many times as may be necessary. This mean that Commissioner can issue notice U/S 122 for a year more than one time.
The Commissioner shall issue assessment order if he consider that
- any income   chargeable to tax  has been escaped
- total income has been under stated
- excessive refund has been claimed
 The Commissioner shall issue an amended assessment order to the taxpayer stating
01. The amended taxable income of the taxpayers
02- the amended tax amount due
03- the amount of tax paid ,if any
04- the time, manner and place of appealing the amended assessment

122 A Revision by Commissioner

The Commissioner shall not revise any order if 

01. an appeal against the order lies to the Commissioner or to the Appellate Tribunal ,the time within which such appeal may be filed and time is not barred.
02 the order is pending in appeal before the Commissioner appeal or appeal has been made to appellate tribunal.

122 B Revision by Chief Commissioner

The Commissioner either on his own will or on application filed by taxpayer for revision call for record of any proceedings relating to issuance of an exemption or lower rate certificate for deduction / collection of tax.
The Chief Commissioner make such order after inquiry and providing an opportunity of being heard to taxpayers which deem fit in the circumstances of the case.

 Section 121 of Income Tax Ordinance  ( ITO ) Best Judgement Assessment

ITO provide power to make best judgement based on availabe information or material to estimate taxable income and value of tax thereon in the following situation

01.IF a person fails to file return U/S 114 of ITO 2001,
02.Fails to furnish return required U/S  143 and 144 ( Non resident Ship owner or charterer and Non resident aircraft owner or charterer respectively)
03. and furnish a statement required U/S 116 (Wealth Statemen)

After making assessment Commissioner shall issue assessment order stating

Taxable Income of the person,
Amount of tax due
Tax already paid , if any and
time, place and manner of making appeal against assessment

   An assessment order under this section shall only be issued within five years after the end of the tax year or the income year to which it relates.

                 Pakistan Source Income


One of the Pakistan Source Income include Salary Income.

Tax treatment is calculated as per Section of 149 of Income Tax Ordinance. However there are a number of exemptions  (ie Medical Allowance @ 10 % of Basic Pay.which should be deducted from calculating Withholding tax on salary.

Tax Credits

There are a number of tax credits available to salaried person U/S 61,62,63 and 64.

Tax is chargeable to salary income when it is paid.

As pert Circular 18/2004 issued by Board state that employer should make adjustment ( excess / deficiencies ) arising out of any previous deduction or failure to make deduction .


Salaried income is exempt up to Rs. 400,000.

            Government Sources of Income and Expense in Pakistan



01   Tax

02  Non Tax

Government earn major source of its income from Tax and minor source from other than Tax.
Federal Government has apportioned certain business activities against which all province directly collect tax like in Punjab a Provincial tax collection institute Punjab Revenue Authority (PRA) who collect tax on services as per Punjab Sales Tax Act 2012.

Government revenue sources also include a lot such as 
01. External Receipts
02. Earning from Privatization 
03. Bank Borrowing ,etc.

           Expenditure of Government include

01. General Public Services
02. Defence expenses
03. Public order and safety expenses
04. Education affairs
05. Recreation ,culture and religion
06. Social protection 
07. Development expenditure and
08. Subsidized goods
  

Following are most relevant Section of Income Tax Ordinance (ITO) , 2001 which can be relevant to a number of tax payer.

Income Tax Theory

01. Return                                                     Section 114-119
02. Assessment                                             Section 120-126
03. Appeal, Collection and recovery            Section 127-146 B
04. Refund                                                     Section -170
05.Record and Audit                                     Section 172-180 ,214 -C ,D  (214 D repealed October -18
06. Service of notice, representative ,
     Authorized representative                         Section 223,218,172   
07. Withholding tax on salaries                     Section 149
08. Withholding tax on payment to Foreign
      resident                                                      Section 152
09.Profit on Debt                                             Section 151
10.Payment for goods , services and contracts Section -153
11.Export                                                            Section -154
12. Income from Property                                  Section -155
13. Petroleum Products                                      Section 156-A
14.Tax on Prize and Winnings                            Section -156
15. Time of Deduction of Tax                            Section -158           

                              TAXATION SYSTEM IN PAKSITAN

In Pakistan Taxation system is complex due to variation in Laws frequently approved by Parliament of Pakistan.

The Income derivd from Taxation is distributed between Federal and Provincial Government under  the Commission that is under the supervision of president of Pakistan.

In Pakistan normally Tax is collected through


1  Income Tax 

2 Customs Act ,1990

3 Federal Excise Act, 1990

Income Tax is furthered categorised into 

01. Direct Tax

02. Indirect Tax

Direct Tax includes five heads of Income

01. Business Income

2. Salary Income

03. Capital Gain

04. Rental Income

05. Income from other sources         & 

Indirect tax include tax that is not directly charged to income such as 

Sales Tax Act ,1990