ISLAMABAD: Income tax return filers are entitled to various tax reductions, rebates and credits while declaring their income for a tax year, according to a facilitation guide of Federal Board of Revenue (FBR).
The FBR said that income tax payable on taxable income is gross income tax (calculated on taxable income by applying applicable rate on income tax) as reduced by following reductions, rebates and credits:
— Reduction in tax liability
— foreign tax credit
— tax credit on donations, investment etc.
— tax credit on exempt share from association of persons
— tax credit to a person registered under the Sales Tax Act, 1990
— tax credit for balancing, modernization and replacement of plant and machinery
— tax credit for equity investment.
The FBR said that claim of applicable tax reductions, rebates and credits substantially reduce effective tax rate and resultantly the income tax liability of taxpayer.
The reduction in tax liability has been available in cases: senior citizen; full time teacher or full time researcher; yield on profit on behbood and pensioners certificates/accounts; foreign income tax etc.
Tax credit for charitable donation, investment in shares and life insurance, contribution or premium paid to an approved pension fund and profit on debt etc.