The Federal Board of Revenue (FBR) has taken a significant step towards enhancing tax transparency by releasing income tax return forms for Association of Persons (AOPs) for the tax year 2022.
(more…)Tag: Association of Persons
-
Tax rates for business individuals, AOPs during TY2023
ISLAMABAD: Finance Bill, 2022 has proposed to revise tax rates for business individuals and Association of Persons (AOPs) during Tax year 2023.
The government presented its federal budget 2022/2023 and introduced various changes to taxation laws to ensure documentation and plug revenue leakages.
READ MORE: Pakistan reintroduces advance tax on foreign payments
Through Finance Bill, 2022 the basic exemption of tax on income of individuals and AOPs has been increased to Rs600,000 from Rs400,000.
Following is the proposed tax card for business individuals and AOPs.
READ MORE: Exchange companies to withhold tax on payment to MTOs
Sr. No. Taxable Income Rate of Tax 1. Where taxable income does not exceed Rs. 600,000/ 0 per cent 2. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 800,000 5 per cent of the amount exceeding Rs. 600,000 3. Where taxable income exceeds Rs. 800,000 but does not exceed Rs. 1,200,000 Rs. 10,000 + 12.5 per cent of the amount exceeding Rs. 800,000 4. Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,400,000 Rs.60,000 + 17.5 per cent of the amount exceeding Rs. 1,200,000 5. Where taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,000,000 Rs. 270,000 + 22.5 per cent of the amount exceeding Rs. 2,400,000 6. Where taxable income exceeds Rs. 3,000,000 but does not exceed Rs. 4,000,000 Rs. 405,000 + 27.5 per cent of the amount exceeding Rs. 3,000,000 7. Where taxable income exceeds Rs. 4,000,000 but does not exceed Rs. 6,000,000 Rs. 680,000 + 32.5 per cent of the amount exceeding Rs. 4,000,000 8. Where taxable income exceeds Rs. 6,000,000 Rs. 1,330,000 + 35 per cent of the amount exceeding Rs. 6,000,000.” Following are the existing rates of tax for Individuals and Association of Persons for tax year 2022:
READ MORE: Salaried persons denied adjustments against deduction
(1) Subject to clause (2), the rates of tax imposed on the income of every individual and association of persons except a salaried individual shall be as set out in the following Table, namely:—
1. Where taxable income does not exceed Rs. 400,000: the tax rate shall be zero per cent.
2. Where the taxable income exceeds Rs. 400,000 but does not exceed Rs. 600,000: the tax rate shall be 5 per cent of the amount exceeding Rs. 400,000.
3. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000: the tax rate shall be Rs. 10,000 plus 10 per cent of the amount exceeding Rs. 600,000.
4. Where taxable income exceeds Rs.1,200,000 but does not exceed Rs. 2,400,000: the tax rate shall be Rs. 70,000 plus 15 per cent of the amount exceeding Rs. 1,200,000.
READ MORE: New ADR mechanism introduced to facilitate taxpayers
5. Where taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,000,000: the tax rate shall be Rs. 250,000 plus 20 per cent of the amount exceeding Rs. 2,400,000.
6. Where taxable income exceeds Rs. 3,000,000 but does not exceed Rs. 4,000,000: the tax rate shall be Rs. 370,000 plus 25 per cent of the amount exceeding Rs. 3,000,000.
7. Where taxable income exceeds Rs. 4,000,000 but does not exceed Rs. 6,000,000: the tax rate shall be Rs. 620,000 plus 30 per cent of the amount exceeding Rs. 4,000,000.
8. Where taxable income exceeds Rs. 6,000,000: the tax rate shall be Rs. 1,220,000 plus 35 per cent of the amount exceeding Rs. 6,000,000.
-
Tax Rates for Individuals and Association of Persons
ISLAMABAD: The government has decided to retain the tax rates for individuals and Association of Persons (AOPs) for the year 2021-2022, sources in Federal Board of Revenue (FBR) said.
Since there is no change proposed through the Finance Bill, 2021 the rates applicable in Tax Year 2021 shall remain applicable in Tax Year 2022.
Rates of Tax for Individuals and Association of Persons
(1) Subject to clause (2), the rates of tax imposed on income of every individual and association of persons except a salaried individual shall be as set out in the following Table, namely:—
TABLE
S. No. Taxable income Rate of tax (1) (2) (3) 1. Where taxable income does not exceed Rs. 400,000 0% 2. Where the taxable income exceeds Rs. 400,000 but does not exceed Rs. 600,000 5% of the amount exceeding Rs. 400,000 3. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000 Rs. 10,000 plus 10% of the amount exceeding Rs. 600,000 4. Where taxable income exceeds Rs.1,200,000 but does not exceed Rs. 2,400,000 Rs. 70,000 plus 15% of the amount exceeding Rs. 1,200,000 5. Where taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,000,000 Rs. 250,000 plus 20% of the amount exceeding Rs. 2,400,000 6. Where taxable income exceeds Rs. 3,000,000 but does not exceed Rs. 4,000,000 Rs. 370,000 plus 25% of the amount exceeding Rs. 3,000,000 7. Where taxable income exceeds Rs. 4,000,000 but does not exceed Rs. 6,000,000 Rs. 620,000 plus 30% of the amount exceeding Rs. 4,000,000 8. Where taxable income exceeds Rs. 6,000,000 Rs. 1,220,000 plus 35% of the amount exceeding Rs. 6,000,000 -
All members of AOP responsible to pay tax default
KARACHI: Any tax payable by an Association of Persons (AOP) was not recovered in such case every person of the AOP shall be jointly and severally responsible for payment of the tax due.
Officials of Federal Board of Revenue (FBR) said that through Finance Act, 2019 the amendment made to Section 139 of Income Tax Ordinance, 2001 to make responsible every person of an AOP for default payment.
The Section 139 says:
Section 139: Collection of tax in the case of private companies and associations of persons
(1) Notwithstanding anything in the Companies Ordinance, 1984 (XLVII of 1984), where any tax payable by a private company (including a private company that has been wound up or gone into liquidation) in respect of any tax year cannot be recovered from the company, every person who was, at any time in that tax year —
(a) a director of the company, other than an employed director; or
(b) a shareholder in the company owning not less than ten per cent of the paid-up capital of the company, shall be jointly and severally liable for payment of the tax due by the company.
(2) Any director who pays tax under sub-section (1) shall be entitled to recover the tax paid from the company or a share of the tax from any other director.
(3) A shareholder who pays tax under sub-section (1) shall be entitled to recover the tax paid from the company or from any other shareholder to whom clause (b) of sub-section (1) applies in proportion to the shares owned by that other shareholder.
(4) Notwithstanding anything in any law, where any tax payable by a member of an association of persons in respect of the member’s share of the income of the association in respect of any tax year cannot be recovered from the member, the association shall be liable for the tax due by the member.
(5) Notwithstanding anything contained in any other law, for the time being in force, where any tax payable by an association of persons in respect of any tax year cannot be recovered from the association of persons, every person who was, at any time in that year, a member of the association of persons, shall be jointly and severally liable for payment of the tax due by the association of persons.
(6) Any member who pays tax under sub-section (5) shall be entitled to recover the tax paid from the association of persons or a share of the tax from any other member.
(7) The provisions of this Ordinance shall apply to any amount due under this section as if it were tax due under an assessment order.