FBR categorizes heads of income for tax collection

FBR categorizes heads of income for tax collection

ISLAMABAD: The Federal Board of Revenue (FBR) has categorized five heads of income for the purpose of tax collection from individuals and corporate entities on their incomes and profits.

The FBR said that under the Income Tax Ordinance, 2001, all incomes are broadly divided into following five heads of Income:

Salary;

Income from property;

Income from business;

Capital gains; and

Income from Other Sources

Resident

An individual is Resident for a Tax Year if the individual:

— Is present in Pakistan for a period of, or periods amounting in aggregate to, one hundred and [eighty-three] days or more in the tax year;

— Is present in Pakistan for a period of, or periods amounting in aggregate to, one hundred and twenty days or more in the tax year and, in the four years preceding the tax year, has been in Pakistan for a period of, or periods amounting in aggregate to, three hundred and sixty-five days or more; or

— Is an employee or official of the Federal Government or a Provincial Government posted abroad in the Tax Year.

— An Association of Persons is Resident for a Tax Year if the control and management of its affairs is situated wholly or partly in Pakistan at any time in that year;

A Company is Resident for a Tax Year if:

— It is incorporated or formed by or under any law in force in Pakistan;

— The control and management of its affairs is situated wholly in Pakistan at any time in the year; or

— It is a Provincial Government or a local Government in Pakistan.

Non-Resident

An Association of Persons, a Company and an Individual are Non-Resident for a Tax Year if they are not Resident for that year.

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