The Federal Board of Revenue (FBR) has taken a significant step in facilitating tax compliance by issuing income tax return forms specifically tailored for salaried individuals for the tax year 2022.
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Punjab announces 15% increase in salary
LAHORE: Punjab government has announced an increase of 15 per cent for employees of provincial government.
The Punjab government on Wednesday announced its budget for fiscal year 2022/2023. The finance minister announced an increase of 15 per cent for employees of provincial government. Besides, the provincial government also increased 5 per cent for pension.
The finance minister said that provincial government was well aware of high inflation and difficulties of masses.
About the employees of provincial government, the finance minister said the employees were committed to their jobs.
The minister also announced a special allowance of 15 per cent to the salary of employees of grade 1 to grade 19.
Further, the government also increased the minimum wage from Rs20,000 to Rs25,000 per month.
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Sindh increases salary by 15% from July 1, 2022
KARACHI: The Sindh government on Tuesday announced a 15 per cent raise in salary of provincial government employees and 5 per cent increase in pension effective from July 01, 2022.
Sindh Chief Minister Syed Murad Ali Shah announced raise in pay and pension while presenting the provincial budget 2022-2023.
READ MORE: Sindh unveils Rs1.714 trillion budget for 2022/2023
The chief minister announced various relief measures for employees and pensioners during next fiscal year.
He said Adhoc Relief Allowances 2016, 2017, 2018, 2019 and 2021 at the rates admissible to employees of Federal Government are being merged and Revised Basic Pay Scale 2022 for Civil Servants of Government of Sindh is being introduced on the pattern of Federal Government.
Adhoc Relief Allowance at the rate of 15 per cent of Basic Pay Scales to Civil Servants of Government of Sindh w.e.f. 1st July 2022 is proposed.
READ MORE: Khyber Pakhtunkhwa raises salary, pension by 15%
Disparity Allowance at the rate of 33 per cent of Basic Pay will be paid to Civil Servants in BPS-1 to 16 and at the rate of 30 per cent to Civil Servants in BPS-17 and above in lieu of the differential rate of Ad-hoc Relief Allowances 2013, 2015, 2016, 2017, 2018, 2019, 2020 & 2021, which are being abolished w.e.f 1st July, 2022.
Pensioners of Government of Sindh were already getting 22.5 per cent more increase in net pension than pensioners of Federal Government till February 2022. Therefore, an increase at the rate of 5 per cent of net pension will be paid to the pensioners of the Sindh Government w.e.f 1st July, 2022.
READ MORE: Khyber Pakhtunkhwa presents Rs1.33 trillion budget 2022-2023
Thus, after announcement of 10 per cent increase in net pension by Federal Government in March 2022 and enhancement of the rate of increase to 15 per cent from 1st July 2022, the pensioners of Government of Sindh will still be getting 12.5 per cent more of net pension than the pensioners of Federal Government.
READ MORE: Advance tax on immovable property purchase enhanced to 250% for non-filers
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Khyber Pakhtunkhwa raises salary, pension by 15%
PESHAWAR: Khyber Pakhtunkhwa on Monday announced 15 per cent increase in salary of provincial government employees and 15 per cent increase in pension as well.
Finance Minister Taimur Salim Jhagra announced the increase in salary and pension of provincial employees while presenting the provincial budget 2022-2023.
READ MORE: Khyber Pakhtunkhwa presents Rs1.33 trillion budget 2022-2023
The minister announced Rs15 percent increase in salaries and pension of all the government employees, Rs15 percent ad-hoc relief allowance, adding the increase for grade1-19 employees besides DRA allowance.
He said risk allowance of police officials from grade 7-16 have been increased and was brought at par of DRA in line with the police martyrs package.
The Finance Minister Taimur Salim Jhagra said that Rs447.9 billion would be spent on salaries including Rs372.1 billion in settled districts and Rs75.8 billion through merged tribal districts while Rs107 billion on pension including Rs106 billion in settled districts and Rs one billion in merged tribal districts.
READ MORE: Advance tax on immovable property purchase enhanced to 250% for non-filers
He said 100 percent increase in pension expenditure have been witnessed in last couple of years, adding expenditure of pensions, which was only one percent of total KP budget expenditure in 2003-04 ie Rs0.87 billion has jumped to 14.7percent ie Rs90 billion in 2021-2022.
READ MORE: Pakistan massively increases taxation on motor vehicles
He said amendment in KP Civil Servant Act 1973 has been made under which contributory and provident fund were increased for newly recruited employees under contributory pension scheme under which either lumsum amount one time or long terms investment offer would be given to retired employees.
As many as services of 63,0000 employees would be regularized including 675 adhoc doctors from July 1, 2002, regularization of 58,0000 teachers and 4079 employees of 128 projects of erstwhile Fata during 2022-2023.
READ MORE: New rates of capital gain tax on disposal of securities
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Notification issued for implementing 15% salary increase
ISLAMABAD: The finance ministry has notified an office memorandum for the increase of 15 per cent in the salary of federal government employees from March 01, 2022.
According the memorandum dated February 23, 2022, the employees of the federal government will get disparity reduction allowance at 15 per cent of the basic pay scales 2017 with effect from March 01, 2022.
The federal government on February 10, 2022 announced an increase of 15 per cent in salaries of employees from BS-1 to BS-19.
READ MORE: Federal government announces 15% increase in salaries
The latest memorandum stated that the allowance shall be admissible to civil employees in BPS-1 to BPS-19 of the federal government, (including employees of the federal secretariat, attached departments and subordinate offices) who have never been allowed additional allowance / allowances equal to or more than 100 per cent of the basic pay (whether frozen or not) or performance allowance subject to the following conditions:
READ MORE: Withholding tax rates on salary income for 2021-2022
a. This allowance will not be admissible to the employees of the organizations who are drawing additional allowance/allowances equal to or more than 100 per cent of the basic pay (whether frozen or otherwise);
b. This allowance will be frozen at the level drawn on March 01, 2022;
c. This allowance will be subject to Income Tax;
d. This allowance will be admissible during leave and entire period of LPR except during extra ordinary leave;
e. This allowance will not be treated as part of emoluments for the purpose of calculation of pension/gratuity and recovery of house rent;
READ MORE: Employers to deduct tax on salary income
f. This allowance will not be admissible to the employees during the tenure of their posting/deputation abroad;
g. This allowance will be admissible to the employees on their repatriation from posting/deputation abroad at the rate and amount which would have been admissible to them, had they not been posted abroad;
READ MORE: Tax on salary income of earlier year
h. This allowance will be admissible during the period of suspension;
i. The term ‘basic pay’ will also include the amount of personal pay granted on account of annual increment (s) beyond the maximum of the existing pay scales.
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Federal government announces 15% increase in salaries
ISLAMABAD: The federal government on Wednesday announced an increase of 15 per cent in salaries of employees from BS-1 to BS-19.
A statement issued by the Finance Division, an arm of the Finance Ministry, said that the government had decided to give 15 per cent disparity allowance on running basic pay to less privileged employees from BS-1 to BS-19 with effect from March 01, 2022. The above package is also recommended to the provinces for adoption from their own funds.
READ MORE: Withholding tax rates on salary income for 2021-2022
Further, a summary for timescale promotion has been initiated by the Finance Division to mitigate the hardship being faced by employees stuck in the same grade for a long time.
READ MORE: Pakistan’s fiscal deficit contracts at 2.1% in 1HFY22
The matter of upgradation of posts on the analogy of Khyber Pakhtunkhwa will be decided based on the findings of the study being conducted by MS Wing of the Establishment Division by end April 2022.
READ MORE: Employers to deduct tax on salary income
Further, the merger of Adhoc Relief/Allowances into pay will be decided on report of pay and pension commission and will be merged in basic pay as per agreement.
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Salary income explained by tax ordinance
KARACHI: Section 12 of Income Tax Ordinance, 2001 explained the salary income for imposition of tax. Any amount received as salary by employees from employers is chargeable to tax.
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Notification for 10% ad hoc increase in salary issued
ISLAMABAD: The President of Pakistan has sanctioned the grant of ad hoc 10 per cent increase in salary of government employees effective from July 01, 2021, according to a notification issued by the ministry of finance on Thursday.
It said that the president has been pleased to sanction with effect from July 01, 2021 and till further orders, an ad hoc relief allowance 2021 at 10 percent of basic pay to all the federal government employees i.e. armed forces personnel, civil armed forces and civil employees of the federal government as well as the civilians paid from defence estimates including contingent paid staff and contract employees employed against civil posts in basic pay scales on standard terms and conditions of contract appointment.
The amount of ad hoc relief allowance 2021:
i. will be subject to income tax;
ii. will be admissible during leave and entire period of LPR except during extra ordinary leave;
iii. will not be treated as part of emoluments for the purpose of calculation of pension/gratuity and recovery of house rent;
iv. will not be admissible to the employees during the tenure of their posting/deputation abroad; and
v. will be admissible to the employees on their repatriation from posting/deputation abroad at the rate and amount which would have been admissible to them had they not been posted abroad.
The finance ministry said that the term ‘basic pay’ for the purpose of ad hoc relief allowance 2021 will also include the amount of the personal pay granted on account of annual increment(s) beyond the maximum of the existing pay scales.
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Grant of disparity reduction allowance at 25pc for government employees notified
ISLAMABAD: The finance division has notified grant of disparity reduction allowance at 25 percent of the basic pay to the civil employees in BS-1-19 of the federal government.
Sources on Friday said that the finance division had issued a notification for the approval of the Federal Government for grant of Disparity Reduction Allowance at 25percent of the basic pay of Basic Pay Scales 2017 with effect from March 01, 2021.
This allowance shall be admissible to civil employees in BPS 1-19 of the Federal Government, (including employees of the Federal Secretariat and attached departments), who have never been allowed additional allowance/allowances equal to or more than 100 percent of the basic pay (whether frozen or not) or performance allowance subject to the following conditions:
a) This Allowance will not be admissible to the employees of the organizations as mentioned in Annexure-I and those employees who are drawing additional allowance/allowances equal to or more than 100 percent of the basic pay whether frozen or otherwise);
b) This allowance will be frozen at the level drawn on March 01, 2021
c) This Allowance will be subject to Income Tax;
d) This Allowance will be admissible during leave and entire period of L.P.R. except during extra ordinary leave;
e) This Allowance will not be treated as part of emoluments for the purpose of calculation of Pension/Gratuity and recovery of House Rent;
f) This Allowance will not be admissible to the employees during the tenure of their posting/deputation abroad;
g) This Allowance will be admissible to the employees on their repatriation from posting/deputation abroad at the rate and amount which would have been admissible to them, had they not been posted abroad;
h) This Allowance will be admissible during the period of suspension;
i) The term “Basic Pay” will also include the amount of Personal Pay granted on account of annual increment (s) beyond the maximum of the existing pay scales.
Annexure-I
Following is the List of organizations/Employees drawing Extra Allowances
1. President/ PM Secretariat
2. Federal Board of Revenue
3. Health personnel/ Health establishments
4. National Accountability Bureau (NAB)
5. All Superior Courts
6. Law & Justice Commission of Pakistan
7. Islamabad Capital Territory Police
8. National Highways & Motorways Police
9. Islamabad Model Traffic Police
10. Airport Security Force
11. Civil Armed Forces
12. Intelligence Bureau
13. Inter Services Intelligence
14. Federal Investigation Agency
15. National Highways & Motorways Police
16. National Assembly
17. Senate Secretariat
18. Parliamentary Affairs Division
19. District Population Welfare Office
20. Clinical Regional Training Institute
21. Directorate General of Special Education
22. National Institute of Rehabilitative Medicines
23. National Institute of Special Education
24. Rehabilitation Centre for Children with Development Disorders Islamabad
25. National Council for Rehabilitation
26. National Braille Press Islamabad
27. Rehabilitation Unit Vocational Rehabilitation & Employment of Disabled persons Islamabad
28. National Mobility & Independence Training Centre
29. National Training Centre for Special Persons G-9/2 Islamabad
30. Vocational Rehabilitation & Employment of Disabled persons SC-1 Islamabad
31. Provision of Hostel facilities at NSEC VHC Islamabad
32. National Special Education Centre for PHC Islamabad
33. National Special Education Centre
34. National Library & Resource Centre Islamabad
35. National Trust for the Disabled
36. Common Unit to Manage Global Fund
37. Federal Services Tribunal
38. Central Health Establishment and its Field Offices
39. Federal Tax Ombudsman
40. Appellate Tribunal Inland Revenue
41. Customs Excise and Sales Tax Appellate Tribunal
42. Environmental Protection Tribunal
43. Accountability Courts
44. Special Judge (Customs Taxation & Anti Smuggling)
45. Special Judge (Central)
46. Banking Courts
47. Special Courts (Control of Narcotics Substance)
48. Special Court (Offence in Banks)
49. Special Court (Anti Terrorism)
50. Competition Appellate Tribunal
51. Intellectual Property Tribunal
52. Drug Courts
53. Anti Dumping Appellate Tribunal
54. Senior Civil Judge West Islamabad
55. Senior Civil Judge East Islamabad
56. District & Session Judge West Islamabad
57. District & Session Judge East Islamabad
58. The civilian employees of PAF who are drawing additional allowance as allowed vide Finance Division’s U.O. note bearing No.F.1(7)lmp/2009-705, dated 19-12-2012.
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FBR allows monthly salary up to Rs25,000 paid in cash as business expense
ISLAMABAD: Federal Board of Revenue (FBR) has allowed monthly salary up to Rs25,000 per employee paid in cash as business expense after amendment made to Income Tax Ordinance, 2001.
The FBR on Thursday issued Income Tax Circular No. 03 to explain changes made to Income Tax Ordinance, 2001 through Finance Act, 2020.
The FBR said that section 21(m) of the Ordinance previously disallowed expenditure on account of monthly salary against business income if it was paid in excess of threshold of Rs 15,000 per month per employee and payment was made otherwise than through crossed cheque or direct transfer of funds to the employees bank account.
The FBR said that the Finance Act, 2020, had increased this threshold to Rs25,000 per month per employee for payment of salary otherwise than through crossed cheque or direct transfer of funds to the employees bank account.
The FBR further explained that Section 21(l) of the Ordinance does not allow deduction against business income if claim of a business expenditure exceeds Rs50,000/- under a single account head in aggregate and payment is made otherwise than through crossed banking instrument, online transfer of payment or credit card from business account of the taxpayer.
However, this inadmissibility of deduction did not apply if a single transaction on account of such business expenditure remained at Rs. 10,000/- or below.
“Finance Act, 2020 has increased these thresholds from Rs. 50,000 to Rs. 250,000/- and from Rs.10,000/- to 25,000/-respectively,” the FBR added.
However, the FBR said that expenditure on account of utility bills is allowed against business income under section 20 of the Ordinance.
“A new clause (p) has been added to Section 21 to disallow it if it is incurred in excess of certain limits and is in violation of certain conditions as may be prescribed by the FBR,” It added.