Tax Reduction for Senior Citizen

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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

  1. His/her age is 60 years or more on the first day of the tax year for which he/she is filing return (This means that for the tax year 2017, the age on July 01, 2016 should be 60 years or more)
  2. The taxable income in the tax year (excluding income on which deduction of tax is final) is Rs. 1,000,000/- or less

 

PROCESS

To claim this reduction while filing income tax return in Iris

(i) click ‘Tax Chargeable / Payments’ on the left of the screen

(ii) click ‘Tax Reductions’

(iii) Enter the amount of Tax Reduction for Senior Taxpayer against code 9303 in the third column titled ‘Amount’

If the amount entered against the code is greater than the reduction allowed as per law, Iris will automatically reduce it to the allowable amount on pressing ‘Calculate’

If a taxpayer fulfills all the above criteria and Iris does not calculate Tax Reduction for Senior Taxpayer, this might mean that the taxpayer’s date of birth is not updated in his profile. In such case, an email should be sent to helpline@fbr.gov.pk along with a scanned copy of CNIC (both sides).

 

 

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