Category: Iris

Salary Arrears

LAW Under Section 12(7) of the Income Tax Ordinance, 2001, if an employee (a) is paid salary in arrears, and (b) as a result of this arrear payment, he is chargeable to tax at higher rates of tax than would have been applicable if the amount had been paid in the tax year in which…

Employment Termination Benefits

LAW Under Section 12(2)(e)(iii) of the Income Tax Ordinance, 2001, Salary includes any amount received on termination of employment including any compensation for redundancy or loss of employment and golden handshake payments Under Section 12(6) of the Income Tax Ordinance, 2001, an employee who has received such payment can elect for the amount to be…

Active Taxpayers List – Who is a Filer?

LAW Under Section 2(23A) of the Income Tax Ordinance, 2001, Filer means a person whose name appears in the Active Taxpayers List (ATL), maintained under powers derived from Section 181A of the Income Tax Ordinance, 2001 A person's name is included in ATL if the person has filed return u/s 114 or a statement u/s 115.…

Tax Reduction for Disabled Taxpayer

LAW Under Clause 1B of Part I of the First Schedule to the Income Tax Ordinance, 2001, an individual taxpayer is entitled to 50% reduction in tax liability if he fulfills the following conditions He / she holds a NADRA CNIC for disabled persons The taxable income in the tax year (excluding income on which deduction…

Tax Reduction for Senior Citizen

A taxpayer (an individual) is entitled to 50% reduction in tax liability. Further more 40% reduction in tax liability is applicable on full time teachers or researchers in non-profit education or research institution duly recognized by: Higher Education Commission; A Board of Education recognized by Higher Education Commission; or A University recognized by Higher Education Commission; or Government training and research institutions.