| Q. 1 |
What is the limit not chargeable to tax for Tax Year 2007?
|
A. |
Rs. 150,000. |
1st Schedule to the Income Tax Ordinance, 2001 |
Q. 2 |
What is the limit not chargeable to tax for salaried women? |
|
A. |
Rs. 200,000. |
1st Schedule to the Income Tax Ordinance, 2001 |
Q. 3 |
What is the taxability of the amount received as self-hiring? |
|
A. |
It is taxable as Income from Property. |
Section 15 of Income Tax ordinance, 2001 |
Q. 4 |
Is income from property included in Salary? |
A. |
No, it will be taxed as separate block of income. |
Section 15 of Income Tax ordinance, 2001 |
Q. 5 |
What are the tax rates for income derived from Salary? |
A. |
Tax rates applicable from tax year 2007 are as under: |
1st Schedule to the Income Tax Ordinance, 2001 |
| |
S. No. |
Taxable income |
Rate of tax. |
(1) |
(2) |
(3) |
1. |
Where taxable income does not
exceed Rs.150,000 |
0% |
2. |
Where the taxable income exceeds
Rs.150,000 but does not exceed
Rs.200,000 |
0.25% |
3. |
Where the taxable income exceeds
Rs.200,000 but does not exceed
Rs.250,000 |
0.50% |
4. |
Where the taxable income exceeds
Rs.250,000 but does not exceed
Rs.300,000 |
0.75% |
5. |
Where the taxable income exceeds
Rs.300,000 but does not exceed
Rs.350,000 |
1.50% |
6. |
Where the taxable income exceeds
Rs.350,000 but does not exceed
Rs.400,000 |
2.50% |
7. |
Where the taxable income exceeds
Rs.400,000 but does not exceed
Rs.500,000 |
3.50% |
8. |
Where the taxable income exceeds
Rs.500,000 but does not exceed
Rs.600,000, |
4.50% |
9. |
Where the taxable income exceeds
Rs.600,000 but does not exceed
Rs.700,000, |
6.00% |
10. |
Where the taxable income exceeds
Rs.700,000 but does not exceed
Rs.850,000, |
7.50% |
11. |
Where the taxable income exceeds
Rs.850,000 but does not exceed
Rs.950,000, |
9.00% |
12. |
Where the taxable income exceeds
Rs.950,000 but does not exceed
Rs.1,050,000, |
10.00% |
13. |
Where the taxable income exceeds
Rs.1,050,000 but does not exceed
Rs.1,200,000, |
11.00% |
14. |
Where the taxable income exceeds
Rs.1,200,000 but does not exceed
Rs.1,500,000, |
12.50% |
15. |
Where the taxable income exceeds
Rs.1,500,000 but does not exceed
Rs.1,700,000, |
14.00% |
16. |
Where the taxable income exceeds
Rs.1,700,000 but does not exceed
Rs.2,000,000, |
15.00% |
17. |
Where the taxable income exceeds
Rs.2,000,000 but does not exceed
Rs.3,150,000, |
16.00% |
18. |
Where the taxable income exceeds
Rs.3,150,000 but does not exceed
Rs.3,700,000, |
17.50% |
19. |
Where the taxable income exceeds
Rs.3,700,000 but does not exceed
Rs.4,450,000, |
18.50% |
20. |
Where the taxable income exceeds
Rs.4,450,000 but does not exceed
Rs.8,400,000, |
19.00% |
21. |
Where the taxable income exceeds
Rs.8,400,000. |
20.00%] |
|
Q. 6 |
Is amount not chargeable to tax i.e. Rs.
150,000/200,000 deductible from taxable income? |
A. |
No, the tax payable will be calculated on taxable income as per slab rates without any deduction. |
1st Schedule to the Income Tax Ordinance, 2001 |
Q. 7 |
Is pension of a Government employee exempt? |
A. |
Yes. |
Clasue-9 Part-I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 8 |
Is pension granted to the family of public servant expired during service is exempt? |
A. |
It is taxable w.e.f 01.07.2006.
|
Clause-18 Part I of 2nd Schedule to the Income Tax Ordinance, 2001
Now omitted through Finance Act, 2006. |
Q. 9 |
What is the taxability of leave encashment? |
A. |
Only encashment of leave preparatory to retirement, in the case of a Government servant is exempt. |
Clause-19 Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 10 |
Is leave encashment paid to an employee of private establishment taxable? |
A. |
Yes |
|
Q. 11 |
Is deputation pay exempt? |
A. |
No. |
|
Q. 12 |
Is special pay exempt? |
A. |
No. |
|
Q. 13 |
Is compensatory allowance of a Pakistani citizen recruited in Pak Mission abroad exempt? |
A. |
Yes, if it does not exceed 75% of the gross salary.
|
Clause 35 Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 14 |
Is overtime allowance exempt? |
A. |
No. |
|
Q. 15 |
What is exemption limit for utilities? |
A. |
Utilities allowance is not exempt. |
|
Q. 16 |
Is medical allowance exempt? |
A. |
It is exempt up to 10% of the basic salary if employee is not entitled for free medical treatment or reimbursement of medical expenses. |
Clause 139(b) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 17 |
Is entertainment allowance exempt? |
A. |
No. |
|
Q. 18 |
Is special additional allowance exempt? |
A. |
No.
|
|
Q. 19 |
What is exemption limit for house rent allowance? |
A. |
HRA is not exempt. |
|
Q. 20 |
Whether accommodation provided by the employer is exempt? |
|
A. |
No, it is taxable as a perquisite. |
|
Q. 21 |
What is the method of taxing the accommodation provided by employer? |
A. |
The amount of house rent that would have been paid (if house was not provided) shall be taken as value of accommodation provided by employer.
|
Rule-4 of Income Tax Rules, 2002 |
Q. 22 |
Is there any minimum limit for addition on account of accommodation provided by the employer? |
A. |
The addition for perquisite of housing facility will not be less than 45% of minimum of the time scale or basic salary where there is no time scale.
|
Rule-4 of Income Tax Rules, 2002 |
Q. 23 |
What is exemption limit for conveyance allowance? |
|
A. |
Conveyance allowance is not exempt. |
|
Q. 24 |
Is motor vehicle provided by employer for personal and business use exempt? |
A. |
No, it is taxable being a perquisite and requires addition to salary @ 5% of the cost of the vehicle.
|
Rule-5 of Income Tax Rules, 2002 |
Q. 25 |
Is a leased motor vehicle provided by employer for personal and business use exempt? |
A. |
No, it is taxable being a perquisite and requires addition @ 5% of the fair market value of vehicle at the commencement of the lease.
|
Rule-5 of Income Tax Rules, 2002 |
Q. 26 |
Whether motor vehicle provided by employer, exclusively for personal use, exempt? |
A. |
No, it requires addition to salary @ 10% of the cost of the vehicle.
|
Rule-5(ii) of Income Tax Rules, 2002 |
Q. 27 |
Is leased motor vehicle provided by employer exclusively for personal use exempt? |
A. |
No, it requires addition to salary @ 10% of the cost of the vehicle.
|
Rule-5(ii) of Income Tax Rules, 2002 |
Q. 28 |
Whether allowances are part of salary and what is their taxability? |
A. |
Allowances received in cash are part of salary and are to be included in salary for taxation purpose. |
Section 12 of Income Tax Ordinance, 2001 |
Q. 29 |
Whether teachers are entitled for rebate? |
|
A. |
Yes, full time teachers and researchers are entitled for reduction @ 75% of the tax payable. |
Clause I(2) Part III of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 30 |
Are headmasters/principals entitled for reduction available to teachers? |
A. |
Yes. |
|
Q. 31 |
Is bonus income exempt? |
|
A. |
No. |
|
Q. 32 |
Are full time teachers/researchers employed in Government training/research institutions entitled for 75% reduction? |
A. |
Yes.
|
Clause I(2) Part III of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 33 |
Is flying allowance paid to pilots, flight engineer and navigators of Pakistan Armed Forces, Pak Airlines exempt? |
A. |
No. |
|
Q. 34 |
Is flying allowance included in total income? |
|
A. |
No. Flying allowance will be taxed @ 2.5% as a separate block of income.
|
Clause (I)(a) Part III of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 35 |
Is flying allowance of JCOs of Armed Forces exempt? |
|
A. |
No, it will be taxed @ 2.5% as a separate block of income.
|
Clause (I)(b) Part III of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 36 |
Is gratuity received on retirement, under the scheme approved by CIT exempt? |
A. |
Yes.
|
Clause (13)(ii) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 37 |
Is commutation of pension paid to an employee of Federal/Provincial
Government/Local Authority/Statutory Corporation taxable? |
A. |
Payment on account of commutation of pension received from Government or under any pension scheme approved by the FBR is not taxable. |
Clause (12) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 38 |
What is exemption limit for commutation of pension or gratuity paid under the FBR’s approved scheme for the purpose of clause 13(iii)? |
A. |
Rs. 200,000.
|
Clause-(13)(3) Part III of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 39 |
Is children’s allowance paid to a Shaheed”s family exempt? |
|
A. |
Yes.
|
Clause-(16) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 40 |
Is accommodation provided to President of Pakistan taxable? |
|
A. |
No.
|
Clause-(51) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 41 |
Is accommodation provided to the Provincial Governor is taxable? |
|
A. |
No.
|
Clause-(51) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 42 |
Is accommodation provided to the Chief of the Army Staff taxable? |
|
|
No.
|
Clause (51) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 43 |
Is accommodation provided to a judge of the Supreme Court Pakistan or High Court exempt? |
A. |
Yes.
|
Clause-(55) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 44 |
Whether medical/hospital reimbursement charges exempt? |
|
A. |
Yes, subject to payment under the terms of employment and the bills containing NTN of the hospital, certified and attested by the Employer. |
Clause-(139)(a) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 45 |
Is free conveyance provided to the Federal Ministers taxable? |
|
A. |
No.
|
Clause-(53)(c) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 46 |
Is free conveyance provided to the Chief of Army/Air/Naval Staff taxable? |
A. |
No.
|
Clause-(52) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 47 |
Is free conveyance provided to the Corp Commanders of Pak Army taxable? |
A. |
No.
|
Clause-(52) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 48 |
Is conveyance allowance, paid in addition to vehicle provided by employer exclusively for business purpose taxable? |
A. |
Yes |
|
Q. 49 |
Is free conveyance provided to a Federal Minister taxable? |
|
A. |
No.
|
Clause-(53)(c) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 50 |
Is free conveyance provided to a judge of the Supreme Court of Pakistan or High Court exempt? |
A. |
Yes.
|
Clause-(56) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 51 |
Is entertainment allowance paid to Chief of Army/Air/Naval Staff taxable? |
A. |
No.
|
Clause-(52) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 52 |
Is entertainment allowance paid to the Provincial Governor taxable? |
A. |
No.
|
Clause-(52) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 53 |
Is entertainment allowance paid to Federal Minister taxable? |
|
A. |
No.
|
Clause-(53) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 54 |
Is accumulated balance of Provident Fund exempt? |
|
A. |
Yes, If payable from a recognized fund.
|
Clause-(23) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 55 |
Is provident fund exempt? |
|
A. |
Payment received from a fund established under Provident Fund Act, 1925 or a recognized fund is exempt.
|
Clause-(22) Part I of 2nd Schedule to the Income Tax Ordinance, 2001 |
Q. 56 |
Whether employers are authorized to adjust tax withheld under other heads? |
A. |
Yes, employers have been empowered to adjust tax withheld under other heads. |
Section 149 of Income Tax Ordinance, 2001 |
Q. 57 |
Whether employers are authorized to allow tax credit available to an employer? |
A. |
Yes, employers have been empowered to allow tax credit available to an employer under the law. |
Section 149 of Income Tax Ordinance, 2001 |
Q. 58 |
In case of provincial govt. employees working in small cities, what amount will be added on account of house rent allowance? |
A. |
Amount actually received as house rent allowance is taxable. However, minimum addition @ 45% will be made only in case when accommodation is provided by the employer. |
Rule-4 of Income Tax Rules, 2002 |
Q. 59 |
Whether a salaried person having no other source of income is required to file return of income? |
A. |
In case of a taxpayer deriving income from salary only, the prescribed annual statement filed by the employer will be considered as sufficient discharge of liability and shall be treated as a return of income furnished under section 114. |
Section 115 of Income Tax Ordinance, 2001 |
Q. 60 |
Which return form should be filed if an employee has income from other source? |
A. |
Return of Total Income/Statement of Final Taxation. (IT-2) |
|
Q. 61 |
Which return form should be filed if an employee has more than one employer? |
A. |
Return of Total Income/Statement of Final Taxation. (IT-2) |
|
Q. 62 |
Whether employer is empowered to adjust withholding tax collected and to allow tax credit available to employee while making deduction of tax from salary paid to employees? |
A. |
Employer is empowered to;
(i) adjust tax withheld and
(ii) allow tax credits available to an employee on:-
- donations to approved NPOs (section 61)
- investment in shares (section 62)
- contribution to approved pension funds (section 63); and
- profit on debt (section 64)
|
Section 149 of Income Tax Ordinance, 2001 |
Q. 63 |
Who are required to file wealth statement? |
A. |
Resident individual, whose last declared or assessed income or the declared income for the year is Rs. 500,000 or more. |
Section 116 of Income Tax Ordinance, 2001 |
