KARACHI: The Finance Bill, 2021 has proposed certain amendments in Income Tax Ordinance, 2001 related to income of salaried persons and business individuals.
According to a presentation made at post budget 2021/2022 webinar of Karachi Tax Bar Association (KTBA) the major changes proposed through the Finance Bill 2021, are:
— Interest income above Rs5 million taxable at normal rates (previously Rs. 36 million); withholding @15 percent (previously 10 percent) for interest income below Rs. 500,000.
— Exemption for medical allowance / reimbursement withdrawn, which needs to be reconsidered.
— Interest income distributed by Provident Fund above Rs. 500,000 taxed @ 10 percent – conflict with 6th Schedule needs to be addressed.
— Rental income taxable at normal rate.
— No tax on transfer of assets via gift / inheritance etc. to non-resident relatives.
— Giftee allowed to claim FMV of gifted assets, after a holding period of 2 years.
— Individuals have been made a withholding agent for payment of commission (having turnover of Rs. 100 million).