Karachi, March 14, 2024 – In response to challenging economic conditions, bank deposits held by salary earners have surged by an impressive 25 percent, reaching a staggering Rs 3.77 trillion by the end of February 2024, according to official data released on Thursday.
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RTO-III Karachi to examine income of all salary persons of private sector
KARACHI: Regional Tax Office (RTO) –III Karachi has been authorized to examine incomes all salary persons in private sector within the jurisdiction of Karachi division.
The Federal Board of Revenue (FBR) issued revised jurisdiction order for RTO-III Karachi effective from October 03, 2019.
The Zone-I of the regional tax office will have authority to exercise powers regarding assessment of incomes of all private sector employees falling within the limits of former civil division of Karachi. (All former towns falling under the jurisdiction of RTO-II & RTO-III, Karachi).
The Zone – I of the RTO also assigned jurisdiction over all classes of cases, persons or classes of persons (corporate and non-corporate) of following sectors other than those specifically assigned to Large Taxpayers Unit (LTU)/LTU-II Karachi, Corporate RTO, Karachi or RTO-II, Karachi or any other zone of RTO-III Karachi whose place of business is situated in the areas falling within the limits of areas falling within the limits of former Bin Qasim Town, Gadap Town, Gulberg Town, Gulshan-e-Iqbal Town, Korangi Town, Landhi Town, Malir Town, New Karachi Town, North Nazimabad Town, including New Nazimabad, Shah Faisal Town and within the limits of Faisal Cantonment, Korangi Cantonment and Malir Cantonment:
i. Manufacturer, exporter, importer, distributor/wholesaler and retailer of textile and textile products and fabrics including ginning, spinning, sizing, weaving, bleaching, dyeing, printing, calendaring, mercenzing and other allied processing etc, whole names begin with alphabet A t Z.
ii. Manufacturer, importer, exporter, distributor/wholesaler and retailer of garments, terry towels and other made ups whose names begin with alphabet A to Z.
iii. Manufacturer, importer, exporter, distributor/wholesaler and retailer of carpets whose names begin with alphabet A to Z.
iv. Manufacturer, importer, exporter distributor/wholesaler and retailer of surgical goods and sports goods whose names begin with alphabet A to Z.
v. Manufacturer, importer, exporter distributor/wholesaler and retailer of leather tanneries whose names begin with alphabet A to Z.
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Salary persons should obtain withholding income tax deduction certificates to get refund/adjustment
KARACHI: Salary persons having above threshold income for tax year 2019 should obtain certificates of withholding tax in order to get refund / adjustment after filing annual income tax returns.
There are many provisions of withholding taxes under Income Tax Ordinance, 2001 where withholding agents deduct tax, which are adjustable against tax liability of taxpayers.
In those cases where salaried persons driving income less than threshold income are also required to file income tax returns to claim their refunds against tax deducted under withholding provisions.
For tax year 2019 the income tax return filing date is due on September 30, 2019 for salaried persons, business individuals and association of persons.
The salaried persons driving income above threshold income i.e. above Rs400,000 are required to file income tax return electronically.
For the tax year 2019, the total tax amount is Rs1,000 for full year where the taxable income exceeds Rs400,000 but does not exceed Rs800,000.
Similarly, the tax amount is Rs2,000 for full year where the taxable income exceeds Rs800,000 but does not exceed Rs1,200,000.
The FBR also prescribed tax rate for other slabs of income of salaried persons.
The FBR collect withholding tax through withholding tax agents from persons filing or not filing income tax returns. However, tax rates higher for persons those are not filing income tax returns. But in case a person is non-filer paid higher amount as withholding tax can claim refund or adjustment after filing income tax return for the tax year in which the deduction was made.
The FBR collects billions of rupees as adjustable withholding tax and it deposited in national kitty as taxpayers do not bother to claim.
A taxpayer can claim all those tax deduction, which are adjustable, but after filing annual income tax return.
A person can claim refund / adjustment on tax deducted under major provisions of Income Tax Ordinance, 2001:
Section 155: tax paid made on account of rent of immovable property.
Section 156B: tax paid on withdrawal of balance under pension fund.
Section 231A: tax paid on cash withdrawal from banks
Section 231B: advance tax paid on purchase or lease of motor vehicles.
Section 235A: tax paid on electricity consumption by domestic consumers
Section 236: advance tax paid to phone company or internet service provider
Section 236B: advance tax paid on purchase of domestic air ticket.
Section 236C: advance tax paid at the time of sale of immovable property.
Section 236D: advance tax paid on organizing function or gathering.
Section 236I: advance tax paid while paying fee to educational institutions.
Section 236K: advance tax paid on purchase of immovable property.
Section 236L: Advance tax on purchase of international air ticket.
Section 236P: Non-filer who paid tax on non-cash banking transactions can avail adjustment on filing income tax return.
Section 236R – advance tax paid on education related expenses remitted abroad.
Section 236U – advance tax on insurance premium
Section 236 Y – Advance tax on persons remitting amount abroad through payment of debit or credit card.
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Finance Bill 2019: late filer salary persons allowed ATL entry
ISLAMABAD: The government has allowed late filers to include Active Taxpayers List (ATL) after payment of penalty. Presently, as per law the late filers are not allowed to ATL entry till next tax year.
The government has proposed this relaxation through Finance Bill, 2019 as part of budget 2019/2020. The payment of penalty has been fixed Rs20,000 for companies, Rs10,000 for Association of Persons (AOPs), Rs3,000 for non-salaried persons and Rs1,000 for salaried persons.
The Federal Board of Revenue (FBR) while explaining the Finance Bill, 2019, said presently law prohibits placing a person’s name on the ATL for the year if the return is not filed within the due date.
Hence, a person who files a return of income after the due date would be subjected to higher tax rates meant for persons not appearing on ATL, for the ensuing year, creating a disincentive towards return filing.
“The condition of not placing name on ATL for the whole year is being abolished.”
Instead, such a person would be penalized by withholding any refund due to a late-filer in the tax year in which the return was filed late without incurring any liability of compensation for delayed refund.
Further, a nominal tax for placement on ATL after the due date of filing of return has been imposed as under:-
1. Company Rs. 20,000
2. Association of persons Rs. 10,000
3. Non-salaried individuals Rs. 3,000
4. Salaried individuals Rs. 1,000
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Finance Bill 2019: Salary Tax card for tax year 2020
ISLAMABAD: The government has withdrawn tax incentives to salary persons and introduces massive changes in the tax card for salaried persons through Finance Bill 2019.
The tax exempt salary income has been increased from Rs400,000 to Rs600,00 for tax year 2020.
For salaried individuals deriving income exceeding Rs.600,000, eleven taxable slabs with progressive tax rates ranging from 5% to 35% are being introduced as under:-
S. No.
Taxable Income
Rate of Tax
01 Where taxable income does not exceed Rs600,000 0% 02 Where taxable income exceeds Rs600,000 but does not exceed Rs1,200,000 5% of the amount exceeding Rs600,000 03 Where taxable income exceeds Rs1,200,000 but does not exceed Rs1,800,000 Rs30,000 plus 10% of the amount exceeding Rs. 1,200,000 04 Where taxable income exceeds Rs1,800,000 but does not exceed Rs2,500,000 Rs90,000 plus 15% of the amount exceeding Rs. 1,800,000 05 Where taxable income exceeds Rs2,500,000 but does not exceed Rs3,500,000 Rs195,000 plus 17.5% of the amount exceeding Rs.2,500,000 06 Where taxable income exceeds Rs3,500,000 but does not exceed Rs5,000,000 Rs370,000 plus 20% of the amount exceeding Rs3,500,000 07 Where taxable income exceeds Rs5,000,000 but does not exceed Rs8,000,000 Rs670,000 plus 22.5% of the amount exceeding Rs5,000,000 08 Where taxable income exceeds Rs8,000,000 but does not exceed Rs12,000,000 Rs1,345,000 plus 25% of the amount exceeding Rs8,000,000 09 Where taxable income exceeds Rs12,000,000 but does not exceed Rs30,000,000 Rs2,345,000 plus 27.5% of the amount exceeding Rs12,000,000 10 Where taxable income exceeds Rs30,000,000 but does not exceed Rs50,000,000 Rs7,295,000 plus 30% of the amount exceeding Rs30,000,000 11 Where taxable income exceeds Rs50,000,000 but does not exceed Rs75,000,000 Rs13,295,000 plus 32.5% of the amount exceeding Rs50,000,000 12 Where taxable income exceeds Rs75,000,000 Rs21,420,000 plus 35% of the amount exceeding Rs75,000,000″; -
Salary income threshold may be revisited after huge tax loss
ISLAMABAD: The government may restore threshold of taxable salary income to June 30, 2018 level in the budget 2019/2020 after facing Rs50 billion revenue loss in the current fiscal year and considering difficult economic situation in the year ahead.
Sources said reverting tax rates for salary persons to the June 30, 2018 position was under consideration for budget 2019/2020. However, no decision in this regard has been taken so far, the sources said.
The new threshold may be between Rs600,000 and Rs800,000 for tax exempt income and further tax slabs may be notified accordingly, the sources said.
In Finance Act, 2018 the rates of taxes upon salary income were considerably reduced and the threshold was increased from Rs.400,000 to Rs.1,200,000.
However, in order to ensure income tax return filing a token tax of Rs1,000/year was imposed on salary persons deriving income between Rs400,000 and Rs800,000 and tax of Rs2,000/year was imposed on persons deriving salary between Rs800,000 to Rs1,200,000.
These changes brought about a substantial decrease in the withholding taxes collected through various government and private withholding agents.
Revenue impact of this change remained Rs.32.4 billion during the period from July 2018 to February 2019, according to a report of FBR sent to ministry of finance.
It is estimated that total revenue loss on this account would be around Rs.50 billion in the current Financial Year, it added.
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Salary persons’ bank deposits surge by 17.26pc to Rs1,569 billion
KARACHI – Bank deposits from salaried individuals have seen a substantial increase of 17.26 percent, reaching an impressive sum of Rs1,569 billion by December 31, 2018, as compared to Rs1,338 billion during the same period the previous year.
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