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Tag: salaried persons

  • Salaried persons pay Rs129 billion in Tax Year 2020

    Salaried persons pay Rs129 billion in Tax Year 2020

    ISLAMABAD: Salaried persons have paid Rs129 billion as income tax at source during tax year 2020, which is 70 percent higher than the collection under this head during preceding year, according to official documents.

    The FBR had collected Rs76 billion as income tax from salaried persons during tax year 2019.

    The FBR officials attributed to significant increase in income tax collected at source form salaried person was due to change in tax slabs through Finance Act, 2019.

    It is interesting to note that the exempt income chargeable to tax was increased to Rs600,000 from Rs400,000 for salaried persons through Finance Act, 2019.

    However, tax rate for salaried persons falling in the higher salary bracket had been increased up to 35 percent through the Finance Act, 2019.

    The tax officials said that share of tax collection from salary has been increased to 11.9 percent in the total collection of withholding taxes during Tax Year 2020.

  • Bank deposits of salaried persons surge by 35 percent to Rs2.252 trillion

    Bank deposits of salaried persons surge by 35 percent to Rs2.252 trillion

    KARACHI: The deposits of salaried persons in the domestic banking system surged by 35 percent in August 2020 as financial institutions provided safe avenue for investment.

    The banking deposits of salaried persons increased to Rs2.252 trillion by end of August 2020 as compared with Rs1.671 trillion in the same month of the last year, according to data released by State Bank of Pakistan (SBP) on Tuesday.

    Banking experts said that in the past the interest rates were very high which enabled banks to offer attractive rate of return to depositors.

    The central bank kept the policy at higher rate of 13.25 percent till March 2020. However, in the wake of economic slowdown after COVID-19, the SBP significantly reduced the policy rate starting from March 2020.

    In the monetary policy announcement on June 25, 2020, the SBP brought down the key policy rate to 7 percent, which is still applicable to date.

    The decision brought the cumulative reduction in the policy rate since mid-March to 625 basis points, the SBP said in its policy statement.

    It is important to note that the deposits of the banking system reached to a record high of Rs16.327 billion by August 2020.

    The categorization of deposits showed personal deposits registered 18.53 percent growth to Rs8.051 trillion in August 2020 as compared with Rs6.792 trillion in the same month of the last year.

    The deposits of salaried persons are part of the category of personal deposits.

    The other components of this category i.e. deposits of self employed registered 12 percent increase to Rs3.376 trillion in August 2020 as compared with Rs3.012 trillion in the same month of the last year.

    Meanwhile, the deposits of other personal accounts registered 15 percent growth to Rs2.423 billion as compared with Rs2.108 billion in the same month of the last year.

  • Tax collection from salaried persons surges by 68 percent

    Tax collection from salaried persons surges by 68 percent

    KARACHI: The collection of income tax from salaried persons registered 68 percent growth during July – March 2019/2020 due to upward revision in tax rates on various salary slabs, State Bank of Pakistan (SBP) reported in its Third Quarterly Report on Pakistan Economy issued on Thursday.

    The collection under this head increased to Rs89.7 billion during July – March 2019/2020 as compared with Rs53.5 billion in the corresponding period of the preceding fiscal year.

    The SBP attributed the rise in tax collection from salary to upward revision in tax rates on various salary slabs.

    The central bank said that the Federal Board of Revenue (FBR) collected Rs41.3 billion as advance tax on telephone/mobile phones during July – March 2019/2020 showing around 7-time higher than the collection of Rs5.3 billion in the corresponding period of the preceding fiscal year.

    The advance tax collection was remained suspended in 2018/2019 which resulted in nominal collection in the same year. However, after the resumption of collection granted by the court resulted in phenomenal growth.

    The advance tax collection from imports registered negative growth of 8 percent to Rs155 billion during July – March 2019/2020 as compared with Rs168.2 billion in the corresponding period of the preceding fiscal year.

    The decline in revenue collection was mainly due to slowdown in the economy in the start of the fiscal year 2019/2020 which resulted in fall in country’s import bill during the period. However, this impact was further worsened following the coronavirus pandemic.

    The FBR also witnessed 52.5 percent decline in advance tax collection from cash withdrawal during the period under review. The revenue authority collected Rs12.7 billion during first nine months of the fiscal year 2019/2020 as compared with Rs26.8 billion in the corresponding period of the preceding fiscal year.

    The SBP report stated that with the abolishment of advance tax on banking transaction for filers in Finance Supplementary (Second Amendment) Bill, 2019, the collection from cash withdrawal declined by 52.5 percent during Jul-Mar FY20 as compared to a rise of 7.8 percent in the review period.

    Collection from contracts grew by 5.5 percent during Jul-Mar FY20 in contrast to a decline of 15.3 percent in the corresponding period last year.

    This is largely due to higher PSDP releases during the period under review.

  • Tax slabs for salaried person for tax year 2020/2021

    Tax slabs for salaried person for tax year 2020/2021

    KARACHI: Following are the tax slabs for salaried persons to be applicable during tax year 2021 (2020/2021).

    1. Where taxable income does not exceed Rs. 600,000: the tax rate shall be zero percent

    2. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000: the tax rate shall be 5 percent of the amount exceeding Rs. 600,000

    3. Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 1,800,000: the tax rate shall be Rs. 30,000 plus 10 percent of the amount exceeding Rs. 1,200,000

    4. Where taxable income exceeds Rs. 1,800,000 but does not exceed Rs. 2,500,000: the tax rate shall be Rs. 90,000 plus 15 percent of the amount exceeding Rs. 1,800,000

    5. Where taxable income exceeds Rs.2,500,000 but does not exceed Rs. 3,500,000: the tax rate shall be Rs. 195,000 plus 17.5 percent of the amount exceeding Rs. 2,500,000

    6. Where taxable income exceeds Rs. 3,500,000 but does not exceed Rs. 5,000,000: the tax rate shall be Rs. 370,000 plus 20 percent of the amount exceeding Rs. 3,500,000

    7. Where taxable income exceeds Rs. 5,000,000 but does not exceeds Rs. 8,000,000: the tax rate shall be Rs. 670,000 plus 22.5 percent of the amount exceeding Rs. 5,000,000

    8. Where taxable income exceeds Rs. 8,000,000 but does not exceeds Rs. 12,000,000: the tax rate shall be Rs. 1,345,000 plus 25 percent of the amount exceeding Rs. 8,000,000

    9. Where taxable income exceeds Rs. 12,000,000 but does not exceeds Rs. 30,000,000: the tax rate shall be Rs. 2,345,000 plus 27.5 percent of the amount exceeding Rs. 12,000,000

    10. Where taxable income exceeds Rs. 30,000,000 but does not exceeds Rs. 50,000,000: the tax rate shall be Rs. 7,295,000 plus 30 percent of the amount exceeding Rs. 30,000,000

    11. Where taxable income exceeds Rs. 50,000,000 but does not exceeds Rs. 75,000,000: the tax rate shall be Rs. 13,295,000 plus 32.5 percent of the amount exceeding Rs. 50,000,000

    12. Where taxable income exceeds Rs. 75,000,000: the tax rate shall be Rs. 21,420,000 plus 35 percent of the amount exceeding Rs. 75,000,000

  • PTBA recommends restoring Rs1.2 million threshold for salaried persons

    PTBA recommends restoring Rs1.2 million threshold for salaried persons

    KARACHI: Pakistan Tax Bar Association (PTBA) has recommended to restore basic threshold of Rs1,200,000 for salaried persons in the budget 2020/2021.

    According to a presentation of Zeeshan Merchant, advocate high court, given on behalf of the PTBA, urged the government to restore the basic threshold of Rs1.2 million that was available for tax year 2019 and the rates applicable for tax year 2019 for salaried persons, individuals and Association of Person (AOPs).

    Alternatively, the tax bar urged the authorities to allow a tax reduction of at least 25 percent of the tax payable to individuals and AOPs, who are subject to tax under Part I of First Schedule to the Income Tax Ordinance, 2001.

    The tax bar highlighted that income under the head ‘salary’ is currently taxed on the gross amount. This policy was introduced by bringing down the corresponding rates of tax for each income slab. However, gradually the income slabs as well as rates of tax were enhanced without restoring the deductible allowances when income from salary was taxed at higher rates.

    The PTBA proposed that either rationalize the rates of tax or restore the deductible allowances on account of house rent, utilities, conveyance etc. to minimize the tax burden of salaried individuals.

    Giving rationale, the PTBA said that it is not justified to tax the salaried individuals (particularly in high income slabs) at such a high rate when other taxpayers are subject to tax on their net profits at much lower rates.

    The limit of Rs1,000,000 for loan to employees below benchmark rate provided under Section 13(7) of the ordinance should be increased to Rs3,000,000.

  • FBR helps salaried persons in filing returns through video tutorials

    FBR helps salaried persons in filing returns through video tutorials

    ISLAMABAD: Federal Board of Revenue (FBR) has issued video tutorials for filing income tax returns by salaried persons for tax year 2019.

    The video tutorials are series of FBR’s campaign to facilitate taxpayers to discharge their liabilities.

    The FBR’s tutorials enable a salaried person to file his/her annual income tax returns without taking assistance of others or paying someone for filing his/her return.

    Persons having more than 50 percent salary income can take help from the tutorials for filing their returns.

    The FBR facilitated the salaried taxpayers to make entries of their tax withheld under various provisions of Income Tax Ordinance, 2001 and claim adjustment against total payable liabilities or claim refund.

    The tutorials are in Urdu language in order to facilitate the large segment of salaried persons having able threshold income in filing their returns.

    The salary class is the largest tax filing community of the FBR. However, there is still large number of employees in government or corporate sector is not filing their returns.

    The last date for filing income tax returns for tax year 2019 is November 30, 2019.

    In order to avoid fine and penalty salary persons can avail opportunity to file their returns in ease steps as shown in following videos:

  • Salary tax slabs for filing returns tax year 2019

    Salary tax slabs for filing returns tax year 2019

    KARACHI: The salaried person shall follow the following slabs for filing income tax returns for tax year 2019 which is due on September 2019.

    01. Where the taxable income does not exceed Rs400,000 the tax shall be zero.

    02. Where the taxable income exceeds Rs400,000 but does not exceed Rs800,000 the tax amount shall be Rs1,000.

    03. Where the taxable income exceeds Rs800,000 but does not exceed Rs1,200,000 the tax amount shall be Rs2,000.

    04. Where the taxable income exceeds Rs1,200,000 but does not exceed Rs2,500,000 the tax shall be 5 percent of the amount exceeding Rs. 1,200,000.

    05. Where the taxable income exceeds Rs2,500,000 but does not exceed Rs4,000,000 the tax shall be Rs65,000 + 15 percent of the amount exceeding Rs2,500,000.

    06. Where the taxable income exceeds Rs4,000,000 but does not exceed Rs8,000,000 the tax shall be Rs290,000 + 20 percent of the amount exceeding Rs4,000,000.

    07. Where the taxable income exceeds Rs8,000,000 the tax shall be 1,090,000 + 25 percent of the amount exceeding Rs8,000,000.

    Provided that where the taxable income exceeds eight hundred thousand rupees the minimum tax payable shall be two thousand rupees.

    The Federal Board of Revenue (FBR) has issued the final income tax return forms for all categories of taxpayers in order to ensure to complete return filing by September 30, 2019.

  • FBR issues draft return forms for salaried, business individuals for tax year 2019

    FBR issues draft return forms for salaried, business individuals for tax year 2019

    ISLAMABAD: Federal Board of Revenue (FBR) has issued draft income tax return form for salaried and business individuals for tax year 2019.

    The FBR issued SRO 951(I)/2019 on Friday and invited comments from stakeholders on the draft forms within seven days from the issuance of the date.

    The revenue body issued the draft electronic return forms for business individuals, salaried persons and Association of Persons (AOPs).

    The date for filing income tax returns for tax year 2019 is September 30, 2019 for the income year July 01, 2018 to June 30, 2019.

    The forms can be downloaded from this link.