Income Tax Procedure for Company

8/8/2019 Income Tax Procedure for Company

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SMEDA Business Guide Series

Procedure for Income Tax

(For a Company)PP&S/1(Reg-5)/R-2/September 20th, 2003

Prepa red By: Po l icy Pl an n i n g & S t ra t egy

Small and Medium Enterprise Development Authority

Government of Pakistan

www.smeda.org.pk

HEAD OFFICE

Waheed Trade Complex, 1st Floor , 36-Commercial Zone, Phase III, Sector XX, Khayaban-e-Iqbal, DHA LahoreTel: (042) 111-111-456, Fax: (042) 5896619, 5899756

[email protected]

REGIONAL OFFICE

PUNJABREGIONAL OFFICE

SINDHREGIONAL OFFICE

NWFPREGIONAL OFFICE

BALOCHISTAN

Waheed Trade Complex,

1st Floor, 36-Commercial Zone,

Phase III, Sector XX,Khayaban-e-Iqbal, DHA Lahore.

Tel: (042) 111-111-456

Fax: (042) 5896619, [email protected]

5TH Floor, Bahria

Complex II, M.T. Khan Road,

Karachi.

Tel: (021) 111-111-456Fax: (021) 5610572

[email protected]

Ground Floor

State Life Building

The Mall, Peshawar.

Tel: (091) 9213046-47Fax: (091) 286908

[email protected]

Bungalow No. 15-A

Chaman Housing Scheme

Airport Road, Quetta.

Tel: (081) 831623, 831702Fax: (081) 831922

[email protected]


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TABLE OF CONTENTS

1. Introduction of SMEDA 03

2.

Role of Policy Planning and Strategy Group 03

3. Flow Chart 04

4. National Tax Number 05

5. Maintenance of Book Accounts 05

6. Penalties 07

7. Preparation of Accounts 09

8. Computation of Income Tax 09

9. Filing of Annual Income Tax Return 15

10.Assessment 16

11.Annexures 16-23


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INTRODUCTION OF SMEDA

The Small and Medium Enterprise Development Authority (SMEDA) was established in1998, with the objective to provide fresh impetus to the economy through the launchof an aggressive SME development strategy.

SMEDA initially focused on nine priority sectors with the intention of developing sectorstrategies and proposing regulatory reforms to stimulate growth on the sole criterion ofSME presence. In depth research was conducted and comprehensive plans wereformulated after identification of impediments and retardants. These strategies asproposed by SMEDA comprehensively covered all important areas of businessoperation such as regulatory environment, finance, marketing, technology and humanresource development. Resultantly, SMEDA successfully formulated strategies forsectors, including fruits and vegetables, marble and granite, gems and jewellery,marine fisheries, leather and footwear, textiles, surgical instruments, transport anddairy.

The task of SME development at a broader scale still required more coverage andenhanced reach in terms of SMEDAs areas of operation. Therefore, after successfullyqualifying in the first phase of sector development SMEDA reorganised its operationsin January 2001. Currently, SMEDA along with the sectoral focus offers a range ofservices to the SMEs including over the counter support systems, exclusive businessdevelopment facilities, training and development for SMEs and informationdissemination through wide range of publications. SMEDAs activities can now beclassified into following three broad areas:

1. Creating a Conducive Environment; includes collaboration with policy makers todevise facilitating mechanisms for SMEs by removing regulatory impediments acrossnumerous policy areas

2. Cluster/Sector Development; comprises formulation and implementation of projectsfor SME clusters/sectors in collaboration with industry/trade associations and

chambers3. Enhancing Access to Business Development Services (BDS); take into account

development and provision of services to meet the business management, strategicand operational requirements of SMEs

The aforementioned reorganisation of SMEDA is driven by enhanced interaction withthe stakeholders and suggests that SMEDAs is a true learning organization andalways ready to take lead in the SME development arena.

Role of Policy Planning and Strategy Department

Policy planning and Strategy (PP&S) department of Smeda is the hub of policy andregulatory research that feeds national, provincial and local government institutions,SME associations, industrial clusters and individual entrepreneurs with an ultimateobjective of creating a conducive business environment. It has a mandate to identifyand where suitable initiate strategic projects. Library and Information resource centerof SMEDA is an integral part of PP&S while development of Regulatory Procedures is apart of an overall information dissemination function of the department.


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Assessment by Tax department

Registration of a company with Income Tax

Application for NTN

File of application on IT-A for a company with concerned NTN

Maintenance of books of accounts for a financial/income year

Calculation of income/profitfrom accounts for a financial

year, audited by a CharteredAccountant Firm

Computation of income tax

Filing of Income Tax return alongwith audited accounts

Form of incometax returns forcompanies

4 Tax paymentChallans IT 31(A,B,C,D)

FLOW CHART1

`

1

Calculation of total

taxable income Tax deductions

Calculation of tax atapplicable slab rate

Deduction of advancetaxes

Total tax payable withreturn

(Total income deductions) * slab rate advance taxes = final taxpayable.

Complete IT-A

One attestedNIC copy of allpartners/directors

Incorporationcertificate

Memorandum/Articles ofAssociation.

Profit andLossaccount

BalanceSheet

Fixed assetsand

depreciationschedule

Books

Record


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NATIONAL TAX NUMBER (NTN)

Every company is assigned a national tax number (NTN). The reason for having a NTNis that a company cannot file its returns if it does not have the NTN, and for thosecompanies which do not have NTN must file an application for it. The application formcan be obtained from nearest NTN Centers (located at Income Tax Building, Shahrah-e-Kamal Attaturk, Karachi; Income Tax House, Nabha Road, Lahore; OR CDA Block -II, Old CBR Building, Melody,G-6 ,Islamabad) or downloadable from CBR websitewww.cbr.gov.pk.

The documentation required for companies is as follows.

Photo copies of NICs of all the partners or directors.

Incorporation or the registration certificate.

Application for NTN by individual partners or directors in case they do not haveNTN.

Class-1 gazetted officer or an officer of the state owned bank should attest alldocuments.

MAINTAINANCE OF BOOK OF ACCOUNTS

It is mandatory for a company to maintain books of accounts and accounting records.For this purpose, the company according to Income Tax Rules 2003 must maintainthe following accounting records.

Cash memo or invoice

It is acknowledgement of sale or transaction, required to be issued for eachtransaction of sale and carbon or duplicate copy should be retained to supportthe tax return by law. The memo should be serially numbered containing date,name or business name, national tax number, sales tax registration number,quantity and value of goods sold or services rendered.

Daily record of receipts, sales, payment, purchases and expenses This record should be maintained in a systematic manner and no specificformat prescribed for it but this would help the company to prepare finalincome statement.

Vouchers of purchases and expenses

These vouchers must be retained to support the return and include Original cash memos, invoices and receipts of purchases and expenses.

Salary register, copies of NIC of employees, attendance record and acknowledgementof salary paid to employees


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Cash book and/or Bank Book or Daily Business RecordThe daily transactions of receipts, sales, payments, purchases and expensesbe recorded in cash book or a bank book in a systematic manner whichwould help to prepare final income statement and balance sheet.

Records of utility bills

Records to be Maintained for Income from Other SourcesThe taxpayers deriving income from other sources are required to maintain followingrecords.

Co m p a n y d e r iv in g i n c o m e f r om p r o p e rt y

Tenancy agreement, if executed;

Tenancy termination agreement, if executed

Receipt for amount of rent received

Evidence of deductions claimed in respect of premium paid to insure thebuilding, local rate, tax, charge or cess, ground rent, profit/interest or sharein rent on money borrowed, expenditure on collecting the rent, legal services

and unpaid rent

Co m p a n y d e r i vi n g i n c om e f r om c a p i t a l g a i n s

Evidence of cost of acquiring the capital asset

Evidence of deduction for any other costs claimed

Evidence in respect of consideration received on disposal of the capitalasset.

Incom e f rom Div iden ds

Dividend warrants.

Incom e f rom Roya l t y

Royalty agreement.

Income from Profit on Debt

Evidence and detail of profit yielding debt

Evidence of profit on debt and tax deducted thereon, like certificate in theprescribed form or bank account statement

Evidence of Zakat deducted, if any

The preparation and maintenance of these accounts is important for a company tocalculate its annual profit/income. The tax authorities assess a company on the basis

of particulars mentioned in the tax return. These particulars are taken from auditedaccounts.

All accounts and documents to be maintained under Section 174 of Income TaxOrdinance 2001 and Income Tax Rules 2002 shall be kept/maintained for five yearsafter the end of tax year to which they relate.


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PENALTIES

There are certain kinds of penalties that can be imposed on the taxpayer upon non-compliance of the income tax regulations, which are defined in the following section

Section 182(S182)If a taxpayer fails to produce income return under the Ordinance or an incomestatement under Section 115 (4), a penalty equal to one-tenth of one percent of taxpayable for each default day subject to a minimum penalty of Rs. 500 and maximumof Rs. 25, 000 is imposed.

A person failing to provide any statements as required under Section 165 of thisOrdinance is required to pay a penalty of Rs.2, 000. Also if a person continues to fail tofurnish the statement, an additional penalty of Rs.200 for each day of default will beimposed.

Section 183(S183)

According to this section taxpayer who fails to pay any tax by due date shall besubjected to1. Penalty of 5% of the amount of tax in case of first default,2. Additional 20% penalty of amount for second default,3. 25% in case of third default and4. Upto 50% for fourth and subsequent default but the total penalty would not exceed

above 100%.

If the amount of tax in respect of any penalty imposed under sub-section (1)decreases, the amount of penalty would also reduce accordingly.

Section 184(S184)

A person furnishing inaccurate particulars in returns will have to pay a penalty equalto the amount of tax that he tries to evade by doing so.

Section 185(S185)If a person fails to maintain records as required by the tax law,1. A penalty of Rs.2, 000 shall be imposed in case of first failure,2. Rs.5, 000 for second failure and3. Rs.10, 000 for third and subsequent failure.

Section 187(S187)A person submitting false particulars in statement of various advance taxes paid

under Section 147 shall have to pay a penalty equal to 200% of the tax shortfall and25% of shortfall in cases other than Section 147. PENALTIES

There are certain kinds of penalties that can be imposed on the taxpayer upon non-compliance of the income tax regulations, which are defined in the following section


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Section 182(S182)If a taxpayer fails to produce income return under the Ordinance or an incomestatement under Section 115 (4), a penalty equal to one-tenth of one percent of taxpayable for each default day subject to a minimum penalty of Rs. 500 and maximumof Rs. 25, 000 is imposed.

A person failing to provide any statements as required under Section 165 of thisOrdinance is required to pay a penalty of Rs.2, 000. Also if a person continues to fail tofurnish the statement, an additional penalty of Rs.200 for each day of default will beimposed.

Section 183(S183)According to this section taxpayer who fails to pay any tax by due date shall besubjected to5. Penalty of 5% of the amount of tax in case of first default,6. Additional 20% penalty of amount for second default,7. 25% in case of third default and

8. Upto 50% for fourth and subsequent default but the total penalty would not exceedabove 100%.

If the amount of tax in respect of any penalty imposed under sub-section (1)decreases, the amount of penalty would also reduce accordingly.

Section 184(S184)A person furnishing inaccurate particulars in returns will have to pay a penalty equalto the amount of tax that he tries to evade by doing so.

Section 185(S185)

If a person fails to maintain records as required by the tax law,4. A penalty of Rs.2, 000 shall be imposed in case of first failure,5. Rs.5, 000 for second failure and6. Rs.10, 000 for third and subsequent failure.

Section 187(S187)

A person submitting false particulars in statement of various advance taxes paid

under Section 147 shall have to pay a penalty equal to 200% of the tax shortfall and

25% of shortfall in cases other than Section 147.


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PREPARATION OF ACCOUNTS

Every company has to prepare its accounts and get them audited by a certifiedChartered Accountant firm. These accounts are required by the company as well asthe income tax authorities to calculate the income of the company and its tax liability/

refund. Following is a set of accounts, which are required with tax returns:

Profit And Loss Account

Balance Sheet

Notes To The Accounts

Details Of Fixed Assets And Depreciation Schedule

There may be difference between the tax calculated by a company and the taxcalculated by the tax department. This difference is due to change in depreciation2rates, lease rentals and other differences as stated in the Income Tax Ordinance 2001,3rd Schedule.

COMPUTATION OF INCOME TAX

Under Section 114 of the Income Tax Ordinance 2001, every company whose incomeis assessable for any income year, will furnish a return of its total income. The incometax returns will be furnished either by registered post or by hand to the Income Taxauthorities. The acknowledgement receipt must be taken from the Income Taxauthorities, at the time of filing of Income Tax returns.

Computation of Total Taxable Income:

In order to compute the income of a company for the year in which it is assessable,following steps will be taken under the following sections of the Income Tax Ordinance

1979:

1. Section 18 (S18):This includes income from business such as

a) Profits and gains of any business,b) Any income derived by any trade, professional or similar relation with the sale

or provision of services to its memberc) From the hire or lease of tangible movable property ord) Any obtained profit on debt

The deductions are allowed under section -20.

Section 39 (S39) This section refers to income earned from any other sources such as, dividend,royalty, profit on debt, ground rent, rent from the sub-lease of land or a building,income from the lease of any building together with plant or machinery, any annuity

2Depreciation: It is a measure of the wearing out, consumption or other losses in the value ofthe Fixed Asset arising from usage, passage of the time or obsolescence.


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or pension, rent received or receivables for providing facilities or any other servicesrelated to the renting of building etc. Deductions are allowed according to section 40.

Section 15 (S15) (If applicable)This pertains to income earned by a business concern in the form of rent received from

house property subject to deductions allowed under section 17.

Section 37 (S37) Capital Gains (If applicable)This section relates to gain arising on discarding or transferring of a capital asset by aperson in a tax year. The deductions allowed are mentioned under section 38.

The total taxable income can be calculated by summing up the above mentionedsections.

S18 + S39 + (S15 + S37) If Applicable = Total Taxable Income.

It is mandatory for a company to show all incomes mentioned above in its annualincome tax returns.

The bonus shares issued by the companies on or after July 1, 2001 will not betreated as its income. Thus, the companies will not have to pay taxes at the timeof issuance of bonus shares. But the companies will collect tax @10% from theshareholders other than the companies.

The companies' income from TFCs is still taxable but the income generated fromTFCs is not taxable.


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TAXES ON EXPORTERS

The tax on exporters is levied according to First Schedule Part III Division IV undersection 154 of Income Tax Ordinance, 2001.

According to Section 154, an authorised foreign exchange dealer, banking company,an Export Processing Zone Authority, a direct exporter and an export house shalldeduct tax at the rate specified in Division IV of Part III of First Schedule at the time ofmaking payment to the exporter or commission agent or to the individual as the casemay be. The tax deducted is taken as final tax payment. Following is a scheduleoutlining tax rates on exports and various industrial sectors.

Schedule 7 Percentage of Tax Description of Industrial Sectors

Part I 0.75% Leather and textile made ups, Engineering goods,sports goods, etc.

Part II 1% Refined / treated salt, Ground batteries, Graniteblocks and slabs, etc.

Part III 1.25% Raw cotton, Rice, Lamb skin, etc.

Deductions

After calculating the total income, various deductions have to be made in order toarrive at the total taxable income. The detail of which along with examples is givenbelow:

Section 40 (S40)Under this section a company is allowed to deduct any expenditure which he hasmade to earn taxable income and Zakat paid by a person on any profit obtained fromdebt which is taxable under section 39. Other deductions included are thedepreciation of any plant, machinery or building used to derive income as per section22, an initial allowance for any plant or machinery utilised to conclude incomeaccording to section 23

Section 17 (S17)Includes deductions such as house repair, insurance of property, rent paid onproperty, profit paid on money borrowed to construct or renovate property, etc.

Section 56 (S56)According to this section a company is allowed to deduct business losses. Theassessee is entitled to set off (adjustment of) his losses under any head of incomeagainst income chargeable to tax. If the loss cannot be completely adjusted, it wouldnot be permitted to be carried forward to next tax year.

Section 20 (S20)A Company can deduct all expenses, which he has made for obtaining taxable income.


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Section 57 (S57)If the loss under head Income from Business cannot be adjusted completely undersection 56, the amount of loss will be shifted to the next tax year and shall be set offagainst the same income head. No loss can be carried forward for more than six years.

Section 58 (S58)The loss from any speculation business can only be adjusted against income from anyother speculation business and if the loss is not completely set off, then that amountof loss can taken to the next tax year but not more than six years.

Section 59 (S59)This section includes Capital Loses. The loss incurred under the head capital gainscan only be adjusted under this and can be carried forward to the next tax year.

Section 60 (S60)A company is entitled to deductible allowance for the amount of any Zakat paid under

Zakat and Ushr Ordinance, 1980.

Second ScheduleThese are exemptions from total income under different conditions.

Therefore, the total deductions would be;

S17 + S20 + S40 + S56 + S57 + S58 + S59 + S60 + II Schedule = Total Deductions

Collection of advance taxes by a company

For a company, it is required under section 50 to deduct, and deposit the advance

income tax in the government treasury, at the time of making payments to otherbusinesses. The various rates are given below:

3.5 % tax for supply of goods will be deducted at the time of payment to otherbusinesses and deposited in the government treasury within 7 days of the day ofdeduction.

5% for rendering ofservices will be deducted from other businesses and depositedin the government treasury within 7 days of the day of deduction.

10% on payment ofbrokerage fees or commissionswill be deducted for paymentsmade to other businesses and deposited in the government treasury.

Monthly average tax on the salary of an employee, if taxable, to be depositedwithin 7 days of the day of deduction.

The above mentioned advanced taxes are applicable to most of the companies.However there are other sub-sections ofsection 50, which are applicable to relatedcases. These sections are given from sections 50(1) to 50(10).

The company has to keep the record of income tax deducted under section 165 (anddeposit it along with tax payment challans (IT 31 A,B,C,D) and ledger accounts too.


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The company is also required to file a six monthly, quarterly and annual report of alldeductions relating to advance taxes,3 to tax authorities.

After deducting the above-mentioned deductions, the company will arrive at the totaltaxable income. Tax liability will be calculated on the basis of the following slabs:

Companies

Company Type

Rates

Banking Company 47%Public Company other than a banking company

(inclusive of surcharge)35%

Other Company(inclusive of surcharge) 43%

Deductions of various Advance Taxes from Tax Liability:After computing the total taxable income of the business concern, the various advancetaxes, which were paid in advance to the government, during the year, will bededucted from the income tax liability.

Examples of more frequently deductible advance taxes as per various sections of theincome tax ordinance are given below:

Section 147Includes advance tax to be paid by the taxpayer deriving income other than CapitalGains, Income from Property, dividends etc on quarterly basis.

Section 148It is advance tax collected by the Custom Collectorate @ 6% on imports.

Section 151This is the tax deducted on saving certificates or on debt @ 10%.

Section 153Includes tax on supply of goods at the rate of 3.5% and 5% on services etc.

Section 233 (I f App l icable )Includes advance tax deducted on brokerage or commission @ 5%.

Section 235Tax collected on commercial or industrial electricity bills.

3A d v a n c e T a x : The advance payment of tax is a scheme in which the assessee is required topay tax in a particular financial year, preceding the assessment year, on the basis of hisestimated income or the latest assessed income.


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Section 236Advance tax deducted on telephone bills.

S147 + S148 + S151 + S153 + S235 + S236 + S233 (If Applicable)= Advance Taxes

Formula for Calculation of Final Tax Liability.After completing the above mentioned procedure, the total tax liability can besummarised as;

Step 1:

Total Taxable Income = S18 + S39 + (S15 + 37) If Applicable

Step 2:

= Total DeductionsS17 + S20 + S40 + S56 + S57 + S58 + S59 + S60 + II Schedule

So the total taxable income can be calculated by the formula:

Total Taxable Income = S18 + S39 + (S15 + 37) If Applicable _ (S17 + S20 + S40 +S56 + S57 + S58 + S59 + S60 + II Schedule) Advance Taxes as mentioned above

Step 3:

The tax liability is then calculated on the basis of rates given below

COMPANIES

Company Type RatesBanking Company 50%

Public Company other than a bankingcompany (inclusive of surcharge)

35%

Other Company (inclusive of surcharge) 45%

Step 4:

Adjustment of advance taxes deducted under section 147, 148, 151, 153, 154, 233,235 and 236.

Step 6:

After completion of all these steps, the taxpayer shall arrive at his total tax liability,which he has to pay.

Therefore, the final income tax liability formula is:


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Total Tax Liability = = S18 + S39 + (S15 + 37) If Applicable _ (S17 + S20 + S40 +S56 + S57 + S58 + S59 + S60 + II Schedule) _ Adjustments of Deductionsmentioned under various sections stated above.

After the above-mentioned procedure the company will arrive at the income taxliability/ refund.

In case of liability, the amount of tax liability has to be submitted in the governmenttreasury through State Bank of Pakistan or designated branches of National Bankof Pakistan on Tax payment Challan IT 31 (A,B,C,D) of which 4 copies are to beprepared. The distribution of the copies is as under:

Two copies of the tax payment challan are kept by the National Bank of Pakistan.

One copy to be attached with the Annual Income Tax return for Companies.

Fourth copy to be retained by the company, for its official use.

In case of refund, a company can contact the Income Tax department to get the refund

of tax, after filing the annual income tax return.

FILING OF ANNUAL INCOME TAX RETURN

After preparation and completion of annual income-tax return, it will be depositedalong with a copy of tax payment challan, with the respective income tax departmenton or before ofSept 30th of the respective year. A detail of income tax offices in majorcities is given in Annexure I. Acknowledgement on prescribed form will be taken fromthe income tax authority at the time of deposit of the said documents.

Under section 165, a company has to provide the Income Tax authorities, a statementregarding payment of salary to its employees and tax deducted on there salaries, on a

quarterly or six monthly basis.

To file the income tax returns, a taxpayer needs to furnish the following documents tothe income tax authorities:

1. Form of return of total income under Income Tax Ordinance, 20012. Tax payment challans (IT 31 A, B, C, D).3. Statement U/S 115(4) - Statement of receipts / incomes subject to final taxation4. Copies of:

a) Audited financial statements (income statement and balance sheet) inaccordance with the provisions of the Companies Ordinance, 1984 orany other statute under which incorporated, registered, formed orconstituted alongwith auditors' and directors' reports thereon.

b) Charts of depreciation/amortization as admissible under the IncomeTax Ordinance, 2001

5. Evidence of payment of Tax deducted/collected at source, Advance tax paid U/S147, Expenditure on personal medical service, Zakat, Tax paid with return U/S137


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6. Photocopies of tax payment challans in case of adjustment of advanced taxesdeducted under Chapter X Part V and Chapter XII of Income Tax Ordinance, 2001.

Please refer to Section 169 of Income Tax Ordinance, 2001 for details of cases that donot require furnishing return of income.

ASSESSMENTAfter completing the above-mentioned procedure, the taxpayer will submit the returnto income tax department and the return filed to the Income Tax Commissioner shallbe considered as an assessment order by the Commissioner the day the return is filed.

However, according to section 122 the Commissioner may amend the assessmentorder within period of five years by making alterations or additions to the return as heconceives necessary.


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ANNEXURE I

ADDRESSES OF INCOME TAX OFFICES IN MAJOR CITIES

Income Tax Offices in Lahore:Address: Income Tax Building,Syed Mauj Darya Road, Lahore.Fax number: 042-9211857

Income Tax Offices in Karachi:Address: Income Tax Office,Sharah-e- Kamal Attaturk, Karachi.Fax number: 021-2628624

Income Tax Office, Northern RegionIslamabadAddress: House no.110-H,Lukman Hakeem Road,Sector G-6/3, Islamabad.Fax Number: 051-9204904

Income Tax Office, IslamabadAddress: Buland Markaz, Blue areaIslamabadFax Number: 051 -9203670

Income Tax Office, RawalpindiAddress: 12 Mayo RoadFax Number: 051-9270422

Income Tax Office, GujranwalaAddress: Income Tax Department,GT Road, GujranwalaFax Number: 0431- 291401

Income Tax Office, SailkotAddress: Income Tax Department,Katchehry Road, SialkotFax Number: 0432-267296

Income Tax Office,PeshawarAddress: Income Tax Department,Jamrud Road, PeshawarFax Number: 091-9216140

Income Tax Office, MultanAddress: Income Tax Department,57-B, Sher Shah Road, MultanFax Number: 061-585219

Income Tax Office, FaisalabadAddress: Income Tax Department,Opposite Allied Hospital, SargodhaRoadFax Number: 041- 761433


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Income Tax Procedure Of A Company Policy Planning & Strategy

14

ANNEXURE IISAMPLE FORMS

Form for NTN (IT-A)

Form of Income Tax Returns (For Companies)


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Income Tax Procedure Of A Company Policy Planning & Strategy

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IT-A

Application for the Issuance of National Tax Number (NTN)(For Registered Firms and Companies)

Category (please tick one): Registered Firm Company

Name of Business:

(Please type in capital letters)

Business Address:

Phone: (Res.) _________________________ (Bus.) _________________________ Fax: _________________________

Principal Business Activity:

Manufacturer Importer Exporter Distributor Wholesaler Retailer Services Others

Description of Business: _________________________________________________________________________________

Principal place of business (address): ______________________________________________________________________

Company type Public Ltd. Private Ltd. Non-Resident Company Others (if yes, please specify)

Reg./Inc. No: Reg./Inc. No:

(Please attach copy of documents)

Residential Status: Resident Non-Resident Old NTN (if any):

PARTICULARS OF PARTNERS/DIRECTORS1. Name ____________________________________________________________________________________________

NTN: - - NIC: - -

(Please attach attested copy of NIC)

2. Name ____________________________________________________________________________________________

NTN: - - NIC: - -


3. Name ____________________________________________________________________________________________

NTN: - - NIC: - -

(Please attach attested copy of NIC)4. Name ____________________________________________________________________________________________

NTN: - - NIC: - -


5. Name ____________________________________________________________________________________________

NTN: - - NIC: - -


(Use additional sheet if required)

I, the undersigned solemnly declare that to the best of my knowledge and belief the information given above is correct and complete.

Name: _________________________________________ Signature of the Principal Officer/Managing Partner

Designation: ___________________________ Official Seal: ________________________________ Date: _______________________

Note:- Please make sure that all information is correctly filled-in and required documents are attached, especially the photocopies of NICs of all the

Partners/Directors and Incorporation/Registration Certificate. Class-I gazetted officer or an officer of the bank should attest all documents. NTN certificate

will not be issued if incomplete form is sent. In case the applicant is a Registered Firm or a Company, its application will not be entertained unless

accompanied by applications of individual Partners/Directors who do not have an NTN.

Sent to: Business Development Manager

NTN Center, CBR House,

Constitution Avenue,

Islamabad. Ph: 9207540 (Ext. 346)


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Circle Inward No.

FOR COMPANIES ONLY

Write one letter (CAPITAL) or a digit in each box. Leave a blank box between each word

Tax YearCircle Inward No./Date of Receipt

Ending on - -d d m m y y y y

Zone Circle

-

- -d d m m y y y y

Phone No.(s) (i) Phone No.(s) (i)

(ii) (ii)

Fax No. Fax No.

E-mail

Type of Company A B C(Use codes listed on page 4)

Residential Status (Please mark in the relevant box) Resident Non-Resident

1. 7.

2. 8.

3. 9.

4. 10.

5. 11.

6. 12.

13.

Authorized

representative,

if anyLegal Practioner

Type of

Company *

FORM OF RETURN OF TOTAL INCOME UNDER THE INCOME TAX ORDINANCE, 2001

Signature, Name & Seal of Receiving Official

National TaxNo.

Sales TaxRegistration No.

Company'sRegistration No.

Code Amount

Taxable Income 9199 Purchases during the year 3905

Code Amount

Total Tax Chargeable Sales/Receipts during the year

Advance Tax Paid U/S 147 9459 Gross Profit

3901

3919

Income last Assessed / Declared (whichever

is higher)

Date ofRegistration

(if any)

Nature ofbusiness

Name of Company

Principal Place of Business Address Registered Office Address

C&MA Others

Public or

Private**

Banking or

Non-banking***

Business code(to be

filled by the Dept.)

Specify

Value of Closing Stocks 3917

ITP CA

Tax Paid with Return U/S 137 9469 Net Profit

SUMMARY OF RETURN

ax e ucte / o ecte at

source9449

3990

Value of Opening Stocks 3916 Paid up capital of the Company


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1. Income/(loss) from Property (attach prescribed Annex II)

2. Income/(loss) from Business

3. Capital Gains (attach prescribed Annex III)

4. Income/(loss) from Other Sources (attach prescribed Annex IV)

5. Foreign income (attach prescribed Annex V)

6. Total Income [ 1 to 5 ]

Exclusions from income

(a) Zakat paid under the Zakat & Ushr Ordinance, 1980 (attach evidence)

(b) Workers welfare fund

(c) Others (Specify) (attach evidence)

(d) Total exclusions [ a to c ]

8. Taxable Income [ 6 minus 7(d) ]

9. Assessed business loss b/f from preceding year

10. Assessed business Loss c/f to next year

11. Assessed unabsorbed depreciation b/f from preceding year

12. Assessed unabsorbed depreciation c/f to next year

1. Taxable Income [ as per part I ]

2.

3. (a) Income tax reductions (attach prescribed Annex VI)(b) Income tax credits (attach prescribed Annex VI)

4. Income tax [ 2 minus { 3(a) + 3(b) } ]

5. Minimum tax U/S 113 or U/S 148(8)

6. Tax chargeable [ 4 or 5 (whichever is higher) ]

7. Additional tax U/S 205

8. Workers Welfare Fund

9. Total [ 6 to 8 ]

10. (a) Tax deducted/collected at source (attach prescribed Annex VII)

(b) Advance tax paid U/S 147

(c) Tax paid with return U/S 137

(d) Adjustment of prior year(s) refunds (attach year wise details with dates of determinati on by the department)

11. Tax payments [ 10(a) to 10(d) ]12. Tax payable / refundable [ 9 minus 11 ]

3999

Code Amount

2999

5999

9098

9099

Code Amount

COMPUTATION OF TAX

9199

9201

9301

9302

9449

9469

94999999

PART I

COMPUTATION OF INCOME

Description

4999

7.

9121

9138

9139

9125

PART II

Description / Particulars

Gross income tax

9459

9399


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18

1.

2.

3.

4.

5.

6. Total [ 1 to 5 ]

1. Prescribed Annex I II III IV V VI VII

2. Statement U/S 115(4) - Statement of receipts / incomes subject to final taxation

3. Copies of: - (a)

(b) Charts of depreciation/amortization as admissible under the Income Tax Ordinance, 2001

4. (a) Tax deducted/collected at source (b) Advance tax paid U/S 147 (c) Tax paid with return U/S 137

(d) Zakat. (e) Workers Welfare Fund (f)

5. In case of a new taxpayer (without an NTN), NTN Registration Form

6. Any other document (specify)

7. Number of documents attached

Note: 1.

2. Use additional sheets where necessary.

I, the undersigned, solemnly declare that to the best of my knowledge and belief:

a.

b. The amount of income and other particulars are truly stated;

c. during the year for which this Return is made -i.

ii. no other income accrued or arose or can be treated to have accrued or arisen;

iii. no legally inadmissible deduction / expenditure has been claimed; and

iv. the company had no other source of income; and

d.

(i) (iv)

(ii) (v)

(iii) (vi)

I, further declare that I am competent to make this Return and verify it in my capacity as _______________________________

of ___________________________________________________________________________________(see Note 2 below)

Name Signature

Date - - (of the Taxpayer)

d d m m y y y y NIC No.

Note: 1. The alternative in the verification which are not applicable should be scored out.

2. The verification should be signed by the Principal officer/or Chief Executive of Company.

PART III

INCOME CLAIMED TO BE EXEMPT AND NOT INCLUDED IN TOTAL INCOME

If any of the documents prescribed under the Income Tax Rules as part of the return are not enclosed, the return is

liable to be considered as invalid return under the law.

VERIFICATION (See Note 1 below)

Nature of Income State relevant provisions of law Code Amount

DOCUMENTS ATTACHEDPlease mark for the documents attached

Audited financial statements (income statement and balance sheet) in accordance with the provisions of

the Companies Ordinance, 1984 or any other statute under which incorporated, registered, formed or

constituted alongwith auditors' and directors' reports thereon.

Evidence of

payment of:Donations/investment in shares

etc. (for tax credits)

the information given in this Return and the Annex(es) and the accompanying statement(s) are correct and complete;

no other income was received, or can be treated to have been received (other than that for which a statement of

receipts/incomes subject to final taxation has been separately filed);

the following books of account, documents and records as required by Section 174 of the Income Tax Ordinance, 2001 read with

Rule 29 to 32 of the Income Tax Rules, 2002 thereto have been maintained for the tax year under consideration:-

(in block letters)


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*Company Codes

** Public Company Codes

** Private Company Code

*** Banking Company Codes *** Non-banking Company Code

Company formed and registered under the Companies

Ordinance, 1984 or any other law repealed there under 10Co-operative Society (Other than a Finance Society)

registered under any other law for the time being in force 62

Body corporate formed by or under any law in force in

Pakistan 20Finance Society registered under the Co-operative Societies

Act, 1925 63

Modaraba as defined in the Modaraba Companies and

Modarabas (Floatation and Control) Ordinance, 1980 30Finance Society registered under any other law for the time

being in force 64

Body incorporated by or under the law of a country out-side

Pakistan relating to incorporation of companies 40Any other society (other than Co-operative or Finance)

established or constituted by or under any law for the time

bein in force

65

Co-operative Society (Other than a Finance Society)

registered under the Co-operative Societies Act, 1925 61Local authority in Pakistan

90

A Company which is not a public company009

A company in which not less than 50%shares are held by

the Federal Government 001

A company whose shares are traded on a recognized stock

exchange in Pakistan and remained listed at the end of the

tax year

002

Foreign Association, whether incorporated or not, declared

by CBR to be a company 70

Unit Trust52

Provincial Government80

Trust (Other than a unit trust)51

Unit trust whose units are widely available to the public003

A body corporate which transacts the business of banking in

Pakistan 0002

As defined in the Banking Companies Ordinance, 19620001

Any other public trust004

A company which is not a banking company0009

Income Tax Procedure for Company

Documents

Transcript of Income Tax Procedure for Company