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Guide on Complete Income Tax Laws & Practice in Pakistan 2021-2022

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CHAPTER-1: CHARGE OF TAX

-- Chargeability of tax explained

-- Tax on taxable income
-- Tax on dividends
-- Tax on undistributed profits.
-- Tax on builders.
-- Tax on developers.

CHAPTER-II: TAX ON TAXABLE INCOME

-- Concept of income
-- Classification of income
-- Taxable income
-- Total income
-- Heads of income
-- Taxation on income on residential status

CHAPTER-III: INCOME FROM BUSINESS

-- Income from business

-- Income not chargeable as business income
-- Speculation business
-- Deductions in computing income chargeable under the head “Income from Business”.
-- Deductions not allowed.
-- Admissible or not admissible expenses
-- Apportionment of deductions
-- Deductions Special Provisions-Depreciation.
-- Particulars to be furnished, claim depreciation
-- Disposal of asset
-- Consideration received
-- Non-arm’s length transactions
-- Disposal and acquisition of asset
-- Depreciation on asset owned leasing cos.
-- Cost of depreciable asset, meaning of
-- Initial allowance.
-- Accelerated depreciation to alternate energy products
-- Intangibles.
-- Third Schedule.
-- Pre-commencement expenditure.
-- Scientific research expenditure.
-- Employee training and facilities.
-- Profit on debt, financial cost and lease payments
-- Bad debts.
-- Provisions regarding consumer loans
-- Profit on non-performing debts of a banking company or DFI
-- Transfer to participatory reserve

CHAPTER-IV: TAX ACCOUNTING.

-- Methods of accounting.
-- Cash-basis accounting.
-- Accrual-basis accounting.
-- Stock-in-trade.
-- Long-term contracts.

CHAPTER-V: CAPITAL GAINS.

-- Capital gains.
-- Capital gain tax on disposal of property
-- Capital loss on disposal of listed securities
-- Fair market value of the asset
-- First Schedule- Tax rates
-- Capital gain on disposal of securities.
-- Special provisions relating capital gain tax
-- Acquisition of securities etc. under Rules
-- Deduction of losses in computing the amount chargeable under the head ‘capital.

CHAPTER-VI: INCOME FROM OTHER SOURCES.

-- Income from other sources.
-- Deductions in computing income chargeable under the head ‘Income from Other Sources

CHAPTER-VII: EXEMPTIONS AND TAX CONCESSIONS.

-- Agriculture income.
-- Diplomatic and United Nations
-- Foreign government officials.
-- Exemptions under International Agreements.
-- President’s honors.
-- Profit on debt.
-- Scholarships.
-- Support payments under an Agreement to live apart.
-- Federal, Provincial and Local Governments’ Income.
-- Foreign-source income of short term Resident individuals.
-- Foreign-source income of returning expatriates.
-- Exemptions and tax concessions in the Second Schedule.
-- Exemptions and tax provisions in other laws.
-- Limitation of exemption.

CHAPTER-VIII: LOSSES

-- Set off losses.
-- set off losses of Cos operating hotels
-- Carry forward of business losses.
-- set off business losses consequent of amalgamation.
-- carry forward of speculation business
-- Carry forward of capital losses.
-- Limitation on set off and carry forward losses.
-- Foreign losses.
-- Group taxation.
-- Group relief.

CHAPTER-IX: TAX DEDUCTIBLE ALLOWANCES.

-- Deductible allowances etc.
-- Zakat.
-- Worker’s Welfare Fund.
-- Workers’ Participation Fund.
-- Deduction allowance-profit on debt.
-- Deductible allowance for education expenses.

CHAPTER-X: TAX CREDITS.

-- Application of tax credit.
-- Charitable donations.
-- Tax credit for investment in shares and insurance.
-- Tax credit for investment in health insurance.
-- Contribution to an Approved Pension Fund.
-- Tax credit for point of sale machine
-- Misc. provisions for tax credits
-- Foreign tax credit
-- Tax credit for charitable organization
-- Tax credit for investment in BMR
-- Tax credit for industrial undertaking
-- Tax credit for certain persons
-- Tax credit for specified ind. Undertake

CHAPTER.XI: COMMON RULES.

-- Income of joint owners
-- Apportionment of deductions.
-- Fair market value.
-- Receipt of income.
-- Recouped expenditure.
-- Currency conversion.
-- Tax year.

CHAPTER-XII: DISPOSAL AND ACQUISITION OF ASSETS.

-- Disposal and acquisition of assets.
-- Purchase of assets through banking channel.
-- Cost an asset
-- Consideration received.
-- Non-arm’s length transaction.
-- Non-recognition rules.

CHAPTER-XIII: PROVISIONS GOVERNING PERSONS. CENTRAL CONCEPTS.

-- Person.
-- Resident and non-resident persons.
-- Resident individual.
-- Resident company.
-- Resident association of persons.
-- Associates.
-- Principles of taxation of individuals.
-- Deceased individual.

CHAPTER-XIV: PROVISIONS RELATING TO AVERAGING

-- An individual as a member of AOP.
-- The principles of taxation of AOP

CHAPTER-XV: PRINCIPLES OF TAXATION OF COMPANIES.

-- Principles of taxation of companies.
-- Disposal of business by individual to wholly owned company.
-- Disposal of business by AOP
-- Disposal of assets between wholly owned companies.
-- Disposal of assets under a scheme of arrangement and reconstruction

CHAPTER-XVI: SPECIAL INDUSTRIES.

INSURANCE BUSINESS:
-- Special provisions relating to insurance business.
-- Special provisions relating to trades.

CHAPTER-XVII: Oil, Natural Gas and Other Mineral Deposits

-- Provisions for production etc. & extraction of other mineral deposits.
-- Special provisions for banking
-- Special provisions relating to SMEs
-- Production of oil, gas, exploration etc
-- Relief in offshore operation
-- Onshore operation in Pakistan
-- Acquire petroleum rights by foreign Investors in Pakistan
-- Exploration oil, natural gas, minerals
-- Taxation on profits of power projects

CHAPTER-XVIII: INTERNATIONAL

-- Geographical source income.
-- Gain on disposal of assets outside Pakistan.
-- Foreign source salary of RP
-- Foreign tax credit .
-- Procedure for claiming foreign tax Cr
-- Foreign income tax.
-- Foreign losses.
-- Taxation of PE in Pak of NRP
-- Thin capitalization
-- Restriction on deduction of profit on debt payable to associated enterp.
-- Agreement for double taxation

CHAPTER-XIX: ANTI AVOIDANCE.

-- Transactions between associates
-- Transfer pricing
-- Transactions between associates
-- Arm’s length standard
-- Methods to determine arm’s length
-- Report of CA/CMA
-- Transactions under dealership
-- Recharacterisation income/deduc.
-- Controlled foreign company
-- Salary paid by private company
-- Unexplained income or assets
-- Liability in respect of security trans.

CHAPTER-XX: MINIMUM TAX.

-- Minimum tax on the income-persons
-- Treatment of minimum tax paid
-- Alternate corporate tax

CHAPTER-XXI: RETURNS

-- Special procedure, certain persons
-- Return of income.
-- Business bank account
-- The persons not required file return
-- The persons required, furnish wealth Statement
-- Foreign income/assets statement
-- Method of furnishing return/other documents
-- Procedure for extension
-- Persons not appearing in ATL

CHAPTER- XXII: ASSESSMENTS

-- Assessment
-- Powers of Commissioner for audit
-- Best judgment assessment
-- Evidence of assessment .

CHAPTER-XXIII: APPEALS

-- Appeal to Commissioner
-- Procedure in appeals
-- Decisions by Commissioner appeal
-- Appellate tribunal
-- Appeal to appellate tribunal
-- Disposal of appeal by ATIR
-- Reference to High Court
-- Alternate dispute resolution
-- Advance Ruling.

ADVANCE TAX AND DEDUCTION OF TAX AT SOURCE-UNDER WITHHOLDING TAX REGIME

Division I
CHAPTER-XXIV: Advance tax paid by the taxpayer

-- Advance tax paid by the taxpayer.
-- Advance tax from provincial sales tax registered person.

Division II: Advance tax paid to a Collection Agent

-- Imports

Division III: Deduction of tax at source

-- Salary.
-- Dividends.
-- Profit on debt.
-- Payments to non-residents.
-- Payments for goods, services and contracts.
-- Exports.
-- Export of services.
-- Income from property.
-- Prizes and winnings.
-- Petroleum products.

TRANSITIONAL ADVANCE TAX PROVISIONS

-- Advance tax on private motor vehicles
-- Brokerage and commission
-- Tax on motor vehicles.
-- Electricity consumption.
-- Telephone and internet users.
-- Advance tax at the time of sale by auction.
-- Advance tax on sale or transfer of immovable property.
-- Advance tax on sale to distributors, Dealers and wholesalers.
-- Advance tax on sales to retailers.
-- Collection of advance tax by educational institutions.
-- Advance tax on purchase or Transfer of immovable property.
-- Payment to residents for use of Machinery and equipment.
-- Payment to resident for use of Machinery and equipment.

GENERAL PROVISIONS RELATING TO THE ADVANCE PAYMENT OF TAX OR THE DEDUCTION OF TAX AT SOURCE.

CHAPTER-XXV:
Division

-- Time for deduction of tax.
-- Exemption or lower rate certificate.
-- Payment of tax collected/deducted.
-- Failure to pay tax collected/deducted
-- Recovery of tax from the person from whom tax was not collected/deducted
-- Recovery of amounts payable under this Ordinance.
-- Certificate of collection/deduction tax
-- Statements.
-- Furnishing of information by banks.
-- Furnishing of information by financial Institutions including banks
-- Priority of tax collected or deducted.
-- Indemnity.
-- Credit for tax collected or deducted.
-- Tax collected/deducted as a final tax

CHAPTER-XXVI: REFUND, ADDITIONAL PAYMENTS AND INCOME TAX REFUND BONDS

-- Refunds.
-- Electronic processing and electronic Issuance of refunds by the Board.
-- Additional payment for delayed refunds.
-- Payment of refund through income tax bonds.

CHAPTER-XXVII: RECORDS, INFORMATION COLLECTION AND AUDIT

-- Records.
-- Audit.

CHAPTER-XXVIII: TAXPAYER’S REGISTRATION

-- Taxpayer’s registration.
-- Active taxpayer’s list.
-- Compulsory registration in certain cases.
-- Taxpayer’s card.
-- Display of National Tax Number.
-- Business license scheme

CHAPTER-XXIX: PENALTY

-- Offence and penalties.
-- Return not filed within due date.

CHAPTER-XXX: OFFENCES AND PROSECUTIONS

-- Prosecution for non-compliance with certain statutory obligation.
-- Offence by companies and AOP

CHAPTER-XXXI: DEFAULT SURCHARGE

-- Default surcharge.
-- Reduction in default surcharge, consequent to reduction in tax or penalty.

CHAPTER- XXXII: ADMINISTRATION

-- The structure of tax collection authorities
-- Tax collector’s organization set-up

Part I- General

-- Income tax authorities
-- Federal Board of Revenue Act, 2007
-- Federal Board of Revenue Rules, 2007
-- Appointment of income tax authorities
-- Jurisdiction of income tax authorities
-- Delegation

Part II- Directorates-General (DG)

-- D.G.Internal Audit
-- D.G.Training and Research
-- D.G.Intelligence and Investigation IR

Part III- Directorate-General (DG)

-- D.G. of Withholding Taxes
-- D.G. of Law
-- D.G.Research and Development
-- D.G.of Broadening of Tax Base
-- D.G. International Tax Operation
-- D.G.of Immovable Property
-- D.G.of Special Initiative
-- D.G of Valuation
-- Director General of Compliance Risk Management.
-- Jurisdiction of Commissioner
-- Jurisdiction order-Corporate RT Karachi.

CHAPTER-XXXIII: SPCIAL LAW FOR THE PERSONS NOT APPEARING IN ACTIVE TAX PAYERS’ LIST

-- Introduction of Tenth Schedule.
-- Tenth Schedule.

1500 (PKR)
1275 (PKR)