Tax Consultants - FINANCE ACT, 2 0 1 2 Finance... · 2018. 5. 9. · Page 1 of 31 Softax House,...

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Softax House, 51/A-2, Lawrance Road, Lahore Phone: 36312148, 36305534. Fax: 36305535 Email: [email protected], URL: www.softax.com.pk

Commentary on Changes made in Income Tax, Sales Tax & Federal Excise Laws

BY

FINANCE ACT,

2 0 1 2 w.e.f July 01, 2012

Professional contribution by

Noman Iftikhar Khawaja Arif Hussain Ejaz (Advocate)

Softax (Private) Limited Consulting – Training – Online Web Based Services

mailto:[email protected]

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INDEX COMMENTARY BY THE TEAM OF SOFTAX .................................................................................................... 3

INCOME TAX.............................................................................................................................................. 3

SALES TAX ................................................................................................................................................ 20

FEDERAL EXCISE DUTY ............................................................................................................................ 22

Comparison of Tax Liability for Business Individual .................................................................................... 28

Annexure 'A' ................................................................................................................................................ 28

Comparison of Tax Liability for Salaried Taxpayers on the basis of rates proposed in Finance Bill, 2012

(Now abolished) .......................................................................................................................................... 29

Annexure 'B' ................................................................................................................................................ 29

Comparison of Tax Liability for AOP ........................................................................................................... 30

Annexure 'C' ................................................................................................................................................ 30

Comparison of Tax Liability for Salaried Taxpayers on the basis of newly substituted rates of taxes ....... 31

Annexure 'D' ................................................................................................................................................ 31


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COMMENTARY BY THE TEAM OF SOFTAX The amendments will take effect from 1st day of July, 2012 except otherwise provided.

INCOME TAX

1. Capital Gain on Sale of Securities [Sections 2(5), 37A, 100B, 233A, Division VII, Part I,

1st schedule & 8th Schedule]

Capital Gain on Sale of Securities (Section 37A), was inserted by Finance Act, 2010. The Finance

(Amendment) Ordinance, 2012 dated April 24, 2012 made changes in the taxability procedure of

Capital gain on sale of securities and also announced amnesty to attract investors of Stock

Exchange. These amendments have been included in the Finance Act, 2012 and promulgated

through the parliament to comply the constitutional requirement with regard to the issuance of

ordinance.

• In Section 2 - Definitions, A new clause (35AA) has been inserted, to define “National Clearing Company of Pakistan Limited (NCCPL)” incorporated and licensed by SECP as Clearing House.

• Section 37A deals with “Tax on Capital Gains on Sale of Securities” relevant to that year.

Insertion made that “capital gain exempted under this ordinance shall not come within the purview of Section 37A”.

• The consideration received on disposal of securities less cost of acquisition shall be

considered as Gain on disposal of securities.

• Inserted new section 100B which mainly states that subject to the Provisions of Section 37, Capital Gains & related tax on disposal of listed securities shall be computed, determined, collected and deposited in accordance with the rules laid down in newly inserted Eighth Schedule. This procedure will not be applicable to the following persons:

a) A mutual fund b) A banking company, a non-banking finance company, and an insurance

company subject to tax under the Fourth Schedule c) A modraba: d) A foreign institutional investor being a person registered with NCCPL as foreign

institutional investor; and e) Any other person or class of persons notified by the Board.

• Clause (c) and (d) of sub-section (1) of Section 233A is omitted which dealt with the

collection of advance tax by stock exchange from its members “in respect of trading of shares by the Members” and “in respect of financing of carryover trades in share business” respectively. Now NCCPL shall withheld tax on these transactions.


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• Through insertion of new section 233AA, NCCPL shall collect advance tax from the members of Stock Exchange registered in Pakistan, in respect of margin financing in share business @ 10%. Corresponding change in line with deletion of tax on margin financing from section 233A.

• In the First Schedule, Part I, Division VII - The rates of tax to be paid under Section 37A has been substituted as follows:

o Less than six months holding of shares, Tax rates for TY 2013 & 2014 are

reduced from 12.5% & 15% respectively to 10%. o Less than twelve months holding of shares, Tax rates for TY 2013 & 2014

reduced from 8.5% & 9% respectively to 8%. o More than twelve months holding of shares is exempt from levy of tax.

Eight Schedule

Rules for the computation of capital gain on listed securities

• Capital Gain under the Provisions of Section 37A and 100B - Tax on Capital Gains shall be collected and deposited on behalf of taxpayers by NCCPL in the manner prescribed.

• NCCPL shall develop automated system to fulfill its purpose

• Required information shall be furnished to NCCPL by Central Depository Company (CDC)

of Pakistan Limited.

• NCCPL shall issue an annual certificate to the taxpayers in respect of Capital Gains relevant to that year Provided that certificate may be issued for shorter period on request of taxpayer or Commissioner IR.

• The taxpayer shall be required to furnish such certificate alongwith annual return of

Income.

• The NCCPL will furnish a statement of Capital Gains & tax thereon of the taxpayers to FBR within 30 days of the end of each Quarter.

• The enquires, with regard to the investment made in the Listed Securities prior to the

Eighth Schedule shall not be made provided that:

i. A statement of Investment shall be filed by the taxpayer alongwith Return of Income & Wealth Statement for TY 2012.

ii. The investment is to be made for a period of 45 days upto 30th June 2012 (In

between 27-04-2012 to 30-06-2012).

• Enquires as to nature & source of investment in the shares of Public Company traded on Registered Stock Exchange, shall not be made from the period ranging from 24th April 2012 to June 30, 2014 provided that:


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a) The amount remains invested for 120 Days. b) Tax on capital gains has been accordingly discharged. c) A statement of Investments is to be filed alongwith Return of Income & Wealth

Statement.

• Certain Provisions of this Ordinance shall not apply to the Capital Gains under this Schedule, with regards to the recovery and collection of advance tax and deduction of tax at source except recovery of tax referred by NCCPL to the Board.

• The payment of tax collected by NCCPL on behalf of the Board shall be computed as

prescribed in this Schedule and be deposited alongwith interest thereon by the end of 31st of July every year.

• Any person who does not want to opt for determination and payment of tax under this

schedule, he shall submit an irrevocable option to NCCPL after Commissioner’s approval.

• A Regular System & procedural Audit on quarterly basis shall be conducted by the PRAL Authorities and representative of FBR not below the rank of the Additional Commissioner IR.

• NCCPL shall implement the recommendations of PRAL and Additional Commissioner IR

after the Audit but no penal action shall be taken against NCCPL on error, omission and mistake.

• If NCCPL unable to recover the amount of tax, NCCPL will be empowered to refer a

particular case to FBR for recovery of the amount of tax.

• The first certificate with respect to capital gains and tax thereon shall be issued by NCCPL for Tax Year 2012 for the period starting from April 24. 2012 to June 30, 2012.

2. Total & Taxable Income [Section 9, 10 & 53(1A)] Income exempt from tax under any of the provisions of Income Tax Ordinance, 2001 will

become part of total income but the taxable income shall consist of person’s income under all heads of income for the year (i.e. salary, business, property, capital gain and other sources). In line with the changes made in section 9 and 10, sub-section (1A) of section 53 has been deleted and the concept of exempt income as part of total income is incorporated in section 10.

3. Loan by employer to employee [Section 13(7)] Profit on loan by the employer to the employee is chargeable to tax under the head “Salary” at

the benchmark rate (For TY 2003 5% additional 1% for each successive year) where no profit on loan is payable by the employee or the differential of actual profit paid by the employee and the benchmark rate.

Now the bench mark treatment will be applicable only to the loans exceeding Rs. 500,000/-


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The current bench mark rate for Tax Year 2012 is 14%. From Tax Year 2013 onward the bench mark rate will not exceed 10% pa.

3A. Depreciation [Section 22(13)(a)] The cost of passenger transport vehicle for the purpose of depreciation was restricted upto Rs.

1.5 million, now increased the limit from 1.5 million to 2.5 million. 4. Tax on Immovable Property [Section 37(1A), Division VIII, Part I of 1st Schedule & Section 236C

Division X of Part IV of 1st Schedule]

Immovable property is included in the definition of “Capital Asset” and gain arising on disposal of such property held for a period up to two years will be charged to tax @ 10% if holding period of property is upto one year and 5% if the period is not more than two years. In addition to the above, advance tax @ 0.5% shall be collected at the time of sale or transfer of immovable property from the seller or transferor. The person responsible for registering or attesting transfer shall be responsible to collect tax under this section. The advance tax collected under this section shall be adjustable for the seller or transferor. This section is not applicable to Federal, Provincial and Local Governments.

5. Additional payment on delayed refund [Section 39]

Additional payment received by a taxpayer on delayed refund under any tax law will be taxed under the head “Income from other sources”.

6. Limitation on set off & carry forward of losses of an AOP [Section 59A]

The concept of Non-taxed AOP was omitted by Finance Act, 2007 from Income Tax Ordinance, 2001, but the corresponding changes were not made in section 59A, which are now been made by deleting sub-section (1) & (2) and amending sub-section (3) and (4) of section 59A.

7. Tax credit for investment in shares and insurance [Section 62]

The scope of tax credit under section 62 was extended to life insurance premium in addition to investment in shares by Finance Act, 2011.

The admissibility limit to claim credit under this section has been increased from 15% of the taxable income to 20% and from Rs. 500,000/- to Rs. 1,000,000/-.

To avail the credit, it was also mandatory for the taxpayer to retain the shares for a period of thirty six months, now this period has been reduced from 36 to 24 months.

8. Tax credit for investment [Section 65B]

Through Finance Act, 2010, an incentive was given to companies having industrial undertakings setup in Pakistan against investments made for purchase of plant and machinery for installation,


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for the purposes of Balancing, Modernization & Replacement (BMR) of the plant and machinery already installed therein, equal to 10% of the amount of investment against tax payable in the relevant tax year in which such costs incurred during the period from July 01, 2010 to June 30, 2015. Where no tax was payable by the taxpayer in respect of the tax year in which such plant or machinery was installed, or where the tax payable was less than the amount of credit, the excess amount of credit was carried forward and deducted from the tax payable by the taxpayer in respect of the following tax year, and so on, but no such amount was carried forward for more than two tax years.

Now extended the scope of credit to companies setup in Pakistan before 1st day of July 2011 and make investment through hundred percent new equity (“new equity” as defined in section 65E) during 01-07-2011 and 30-06-2016 for the same purpose, the credit equal to 20% of the amount so invested shall be allowed against the tax payable, including on account of minimum tax u/s 113 and final taxes payable under any provision of Income Tax Ordinance, 2001. The credit shall be allowed in the year of installation of such plant and machinery. Where no tax is payable by the taxpayer in respect of the tax year in which such plant or machinery is installed, or where the tax payable is less than the amount of credit, the excess amount of credit shall be carried forward and deducted from the tax payable by the taxpayer in respect of the following tax year, and so on, but no such amount shall be carried forward for more than five tax years. The scope has been further extended from credit under “BMR and replacement of plant and machinery” to “extension, expansion or BMR and replacement of plant and machinery”.

9. Tax credit for newly established industrial undertakings [Section 65D]

The Finance Act, 2011 allowed 100% tax credit of the tax payable for a period of 5 years w.e.f July 2011 to 100% equity owned companies:

• establish a new industrial undertaking for manufacturing in Pakistan, or • invest any amount in the purchase and installation of plant and machinery, for the

purposes of BMR of the plant and machinery, already installed therein, in an industrial undertaking set up in Pakistan and owned by it.

Now Finance Act, 2012 extended the scope in the following manner:

• Industrial undertaking for manufacturing in Pakistan to “Corporate Dairy Farming” and • Credit from 100% tax payable to 100% tax payable on taxable income including on

account of minimum tax and final taxes payable under any of the provision of this Ordinance.

The admissibility of credit under this section was subject to fulfillment of few conditions, one of the conditions was relevant to 100% equity owned by the company, now the equity shall be raised through issuance of new shares for cash consideration and short term loans and finances obtained from banking companies and non-banking financial institutions for the purpose of meeting working capital requirements shall not disqualify the taxpayer from claiming tax credit.


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The condition relevant to setup of industrial undertaking in section 65B, 65D and 65E shall be linked with the date on which the industrial undertaking is ready to go into production, whether trial or commercial.

10. Tax credit for industrial undertakings established before the first day of July 2011 [Section 65E]

Tax credit proportionate to investment in purchase and installation of plant and machinery for the purpose of BMR for industrial undertakings established before 1st day of July 2011 was allowed through Finance Act, 2011 subject to 100% equity investment.

Finance Act, 2012 changed the condition of 100% equity investment with 100% new equity raised through issuance of new shares for purchase of plant & machinery for an industrial undertaking, including corporate dairy farming for the purpose of expansion of the plant and machinery already installed therein or undertaking a new project. The term “New Equity” means equity raised through fresh issue of shares against cash by the company and shall not include loans obtained from shareholders and directors. Short term loans and finances obtained from banking companies and non-banking financial institutions for the purpose of meeting working capital requirements shall not disqualify the taxpayer from claiming tax credit.

Further allowed tax credit equal to 100% of the tax payable for five years beginning from the date of setting up or commencement of commercial production from the new plant or expansion project whichever is later, subject to installation of plant and machinery between 01-07-2011 and 30-06-2016. The credit shall be allowed for a period of five years including the year in which the plant and machinery is installed.

If separate books of accounts are maintained for expanded or new project, the taxpayer shall be allowed tax credit equal to 100% of tax payable including minimum tax u/s 113 and final taxes payable under any of the provisions of Income Tax Ordinance, 2001 attributable to such expended or new project, otherwise tax payable will be apportioned between new equity and the total equity including new equity.

11. Cost of an Asset [Section 76]

Finance Act, 2012 empowered the Board to prescribe rules for determination of cost for any asset.

12. Consideration received on disposal of an asset [Section 77] Finance Act, 2012 empowered the Board to prescribe rules for determination of consideration

received against disposal of an asset.


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13. Geographical Source of Income [Section 101] Currently the dividend income paid by a resident company is considered as Pakistan source

income. Finance Act, 2012 extended the scope from payment of dividend by a resident company to remittance of after tax profit of a branch of a foreign company operating in Pakistan.

14. Minimum Tax on the Income of certain persons [Section 113]

For the purpose of section 113, the expression “tax payable or paid” does not include tax already paid or payable in respect of deemed income which is assessed as final discharge of tax liability u/s 169 or under any other provision of Income Tax Ordinance, 2001. The rate of minimum tax has been reduced from one percent to one and a half percent.

15. Return of Income [Section 114]

Currently a taxpayer may file revised return by accompanying the revised accounts or revised audited accounts as the case may be and by mentioning the reason for revision of the return.

Now the taxpayer cannot declare taxable income or loss less than or more than as the case may be, determined by an order issued under sections 121, 122, 122A, 122C, 129, 132, 133 or 221 and fulfillment of all three conditions including the new one is mandatory, otherwise return will be treated as invalid.

16. Assessments [Section 120] Presently the Commissioner is required to notice the taxpayer regarding deficiencies in the

return before the end of financial year in which return was furnished. Now the period has been extended to 180 days from the end of the financial year in which the return was furnished.

17. Best Judgment Assessment [Section 121] If the taxpayer does not provide the documents or information required by the commissioner

then the original or revised return filed by the taxpayer shall be of no legal effect and will not limit the Commissioner in exercising the powers provided in section 121.

18. Amendment of Assessment [Section 122] The Commissioner may amend assessment order issued u/s 122C (Provisional Assessment) in

addition to the orders issued u/s 120 and 121. Section 59, 59A, 62, 63 or 65 of the repealed ordinance has been omitted from section 122,

because the assessment period under these sections has been time barred. Finance Act, 2012 empowered the Commissioner to conduct enquiries for amendment of an

assessment order, if he considers that the assessment order is erroneous in so far it is prejudicial to the interest of revenue.


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19. Provisional Assessment [Section 122C] Section 122C was inserted by Finance Act, 2010 to provide authority to the Commissioner to

make a provisional assessment of taxable income or income of the person which will be considered as final assessment if the taxpayer does not file return of income alongwith other required statements/documents within a period of sixty days from the date of service of order of such provisional assessment.

Finance Act, 2012 clarified that an individual or AOP may file manual return but efiling of return

is mandatory for the company alongwith audited accounts. 20. Appeal to the Commissioner (Appeals) [Section 127]

The taxpayer cannot file appeal against the provisional assessment order, the provisional assessment becomes final assessment order if the taxpayer does not file return of income alongwith other required statements/documents within a period of sixty days.

Finance Act, 2012 removed the lacuna and substituted the words “a Provisional assessment order” with “an assessment order”

21. Procedure in Appeal [Section 128]

Finance Act, 2012 empowered the Commissioner (Appeals) to stay the recovery of tax for a period not exceeding 30 days in aggregate after affording opportunity to the Commissioner against whose order appeal has been made.

22. Decision in Appeal [Section 129]

The Finance Act, 2012 abolished the limitation of four months period for issuance of order on an appeal by the Commissioner (Appeals).

23. Appointment of the Appellate Tribunal [Section 130]

Commissioner Inland Revenue service or Commissioner Inland Revenue service (Appeals) with five years experience as Commissioner or Collector was eligible to be appointed as Accountant Member of the Tribunal. Now Finance Act, 2012 reduced the period from five years to three years.

Normally the Judicial Member is appointed as Chairperson of the Tribunal and the Accountant Member is appointed as Chairperson in special circumstances. Now the Act authorized Federal Government to appoint Accountant Member as Chairperson in the normal circumstances.


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24. Appeal to Appellate Tribunal [Section 131]

Finance Act, 2012 substituted three provisos of sub-section (5) relevant to stay the recovery of tax. Now the Tribunal may stay the recovery for a period not exceeding 180 days in aggregate. The period of 180 days will exclude the period of recovery stayed by a High Court.

25. Due date for payment of tax [Section 137] The due date for payment of tax in the case of Provisional Assessment is immediately after a

period of sixty days from the date of service of the notice. Now the taxpayer may make the payment of tax prior to the expiry of sixty days period.

26. Imports [Section 148]

The Finance Act, 2012 removed the ambiguity; currently the tax collected by custom authorities is treated as final tax. Now the finalization of tax is limited to the amount of tax required to be collected, means the excess amount of tax collected by the Custom Authorities will not be treated as final tax and the short amount will be recovered from taxpayer.

27. Profit on debt [Section 151]

Currently the tax deducted under section 151 is treated as final tax. After amendment the deductible amount of tax will be treated as final tax, means the tax not deducted or short deducted on profit on debt, the difference between deducted or short deducted amount with deductible amount will be deposited by the taxpayer and such amount will be treated as final tax.

28. Payments to non-residents [Section 152, Division II, Part III of 1st Schedule]

Section 153A deals with payment for advertisement services to a non-resident media person relaying from outside Pakistan. Finance Act, 2012 consolidated the provisions relevant to non-resident person and shifted the provision of deduction of tax from payment for advertisement services to a non-resident media person relaying from outside Pakistan from section 153A to newly inserted sub-section (1AAA) in section 152. The rate of deduction of tax is to be continued at 10%.

Deduction of tax against Payment to Permanent Establishment of Non-Resident Person in full or part including a payment by way of advance on account of supplies, services and contract shall be taxed under newly inserted sub-section (2A) clauses (a) to (c).

Through Finance Act, 2012 tax is levied on payment to PE of non-resident on account of transport services @ 2%, other services @ 6% and contract @ 6%.

The deductible amount of tax on account of payment to a non-resident person on the execution of contract or sub-contract etc. and insurance or reinsurance premium will be treated as final tax.


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Payment of insurance and re-insurance premium to permanent establishment of non-resident person shall not be taxed subject to written approval of the Commissioner.

29. Payment for goods, services and contracts [Section 153]

In line with amendments made in section 152, the provisions of section 153 will not be applicable to the permanent establishment of non-resident person because PE will be taxed u/s 152. The deductible instead of deducted amount of tax on account of supplies and contract will be treated as final tax on the income of a resident person.

30. Payment to Traders and Distributors [Section 153A, Part II of 1st Schedule]

Every manufacturer at the time of sale to distributors, dealers and wholesalers, shall collect tax @ 0.5% of the value of supply and the said amount of tax will be adjustable against the final tax liability of the distributor, dealer and wholesaler.

31. Exports [Section 154] The deductible instead of deducted amount of tax on account of exports shall be treated as final

tax on the income arising from the transactions related to exports and mentioned in section 154.

32. Prizes and Winnings [Section 156] The deductible instead of deducted amount of tax on account of prize on a prize bond, or

winnings from a raffle, lottery, prize on winning a quiz, prize offered by companies for promotion of sales, or cross-word puzzle shall be treated as final tax on the income from prizes and winnings referred to in this section.

33. Petroleum Products [Section 156A] The deductible instead of deducted amount of tax on income arising from the sale of petroleum

products shall be treated as final tax. 34. Tax collected or deducted as a Final Tax [Section 169] Finance Act, 2012 made corresponding changes in line with changes proposed in sections

relevant to deduction or collection of tax at source, especially the word deducted is substituted with deductible and the commissioner is authorized to recover the amount of tax not deducted or short deducted from the taxpayer u/s 162 instead of withholding agent u/s 161.

35. Additional Payment for delayed refund [Section 171] Now the commissioner will pay 15% instead of KIBOR as further tax on account of delayed

refund.


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36. Notice to obtain information or evidence [Section 176] The firm of Chartered Accountants, as appointed by the Board or the Commissioner to require

production of any record, may enter into the business premises of a taxpayer not selected for audit.

36. Tax Payer Card [Section 181B] The Board may make a scheme for introduction of a tax payer honour card for individual

taxpayers, who fulfill the minimum criteria to be eligible for the benefits as contained in the scheme.

37. Offences and Penalties[Section 182] The taxpayer may voluntarily pay the amount of penalty due under this section by admitting his

default. 38. Power to compound offences [Section 202]

Merger of Income tax, Sales Tax & FED in Inland Revenue Service through Finance Act, 2010, substituted the designation of Director General with Chief Commissioner. The Finance Act, 2012 replaced the term Director General with Chief Commissioner.

39. Default Surcharge [Section 205]

The term KIBOR plus three percent has been substituted with 18% pa, means the rate of default surcharge has been replaced from KIBOR + 3% to 18% pa.

If a person opts to pay the tax due on the basis of order of Commissioner (Appeals), on or before the due date given in the notice u/s 137(2) issued in consequence of the said order and does not file appeal u/s 131, he shall not be liable to pay default surcharge for the period beginning from the due date of payment in consequence of an order appealed against to the date of payment in consequence of notice u/s 137(2).

40. Income Tax Authorities [Section 207]

Currently the officers below the rank of Commissioner are subordinate to the Commissioner and the Commissioner is subordinate to Chief Commissioner and the Chief Commissioner and Commissioner (Appeals) are subordinates to the Board.

Now all the officers shall be subordinate to the Board and Commissioners Inland Revenue to Inspectors Inland Revenue shall be the subordinates to the Chief Commissioner Inland Revenue.

41. Delegation [Section 210]

Corresponding change in line with the changes made in section 176.


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42. Power or function exercised [Section 211]

The Board or with the approval of the Board an authority appointed under this Ordinance, shall be competent to exercise all powers conferred upon any authority subordinate to it.

43. Condonation of Time Limit [Section 214A]

Section 214A was inserted by Finance Act, 2009 where time period for filing of application or any act or thing to be done can be condoned by the Board. Now the Finance Act, 2012 explained the term “any act or thing is to be done” which includes any act or thing to be done by the taxpayer or by the tax authorities.

44. Director General (Intelligence and Investigation), Inland Revenue [Section 230]

The Finance Act, 2012 assigned functions to the Director General (Intelligence and Investigation), Inland Revenue to provide legal cover. Presently Director General (Intelligence and Investigation) is performing its function through an office order.

45. Cash withdrawal from a bank [Section 231A]

Section 231A was inserted by Finance Act, 2005, the purpose was to discourage cash transactions and encourage transactions through banking channel, so the withdrawal of cash from bank exceeding Rs. 25,000/- in a day was subject to deduction of tax.

Now this limit has been increased from Rs. 25,000/- to Rs. 50,000/-.

46. Brokerage and Commission [Section 233]

The collectable instead of collected amount of tax on income of a taxpayer shall be treated as final tax.

1st Schedule Rates of taxes 1(a) AOP was omitted from the domain of slab rates and was converted to straight tax rate regime of

25%. Now again inserted AOPs in the Slab Rates Regime. Note: Comparison of tax liability for Tax Year 2012 and Tax Year 2013 is enclosed as Annexure C

1(b) Rates of tax for Individual other than salaried Individual and AOP:

S. No. Taxable Income Rate of Tax

1 2 3 1 Where taxable income does not exceed Rs. 400,000 0%

2 Where the taxable income exceeds Rs. 400,000 but does not exceed Rs. 750,000

10% of the amount exceeding Rs. 400,000

3 Where the taxable income exceeds Rs. 750,000 but does Rs. 35,000 + 15% of the


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not exceed Rs. 1,500,000 amount exceeding Rs. 750,000

4 Where the taxable income exceeds Rs. 1,500,000 but does not exceed Rs. 2,500,000

Rs. 147,500 + 20% of the amount exceeding Rs. 1,500,000

5 Where the taxable income exceeds Rs. 2,500,000 Rs. 347,500 + 25% of the amount exceeding Rs. 2,500,000

Note: Comparison of tax liability for Tax Year 2012 and Tax Year 2013 is enclosed as Annexure A

2. Rates of tax for Salaried Individual.

The new substituted table for salaried taxpayers:

S. # Taxable Income Rate of Tax

1 0 to 400,000 0%

2 400,000 to 750,000 5% of the amount exceeding Rs. 400,000/-.

3 750,000 to 1,500,000 Rs. 17,500 + 10% of the amount exceeding Rs. 750,000/-.

4 1,500,000 to 2,000,000 Rs. 95,000 + 15% of the amount exceeding Rs. 1,500,000/-.

5 2,000,000 to 2,500,000 Rs. 175,000 + 17.5% of the amount exceeding Rs. 2,500,000/-.

6 2,500,000 and above Rs. 420,000 + 20% of the amount exceeding Rs. 2,500,000

Comparison with proposed table in Finance Bill, 2012

S. No. Taxable Income Proposed Rate of Tax

1 2 3 1 Where taxable income does not exceed Rs. 400,000 0%

2 Where the taxable income exceeds Rs. 400,000 but does not exceed Rs. 750,000

5% of the amount exceeding Rs. 400,000

3 Where the taxable income exceeds Rs. 750,000 but does not exceed Rs. 1,500,000

Rs. 17,500 + 10% of the amount exceeding Rs. 750,000

4 Where the taxable income exceeds Rs. 1,500,000 but does not exceed Rs. 2,500,000 2,000,000

Rs. 92,500 95,000 + 15% of the amount exceeding Rs. 1,500,000

5 Where the taxable income exceeds Rs. 2,000,000 but does not exceed Rs. 2,500,000

Rs. 175,000 + 17.5% of the amount exceeding Rs. 2,000,000

6 Where the taxable income exceeds Rs. 2,500,000 Rs. 242,500 420,000 + 20% of the amount exceeding Rs. 2,500,000

In the fourth slab the actual figure comes to Rs. 92,500, but it is Rs. 95,000 as per new table.


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In the fifth slab the actual amount comes to Rs. 167,500, but it is Rs. 175,000 as per new table. In the sixth slab the actual amount comes to Rs. 255,000. But it is Rs. 420,000 as per new table. Notes: 1. Comparison of tax liability between Tax Year 2012 and the Proposed rates provided in Finance bill,

2012 for Tax Year 2013 is enclosed as Annexure B

2. Comparison of tax liability between originally proposed rates for Tax Year 2013 with above

mentioned substituted rates is enclosed as Annexure D.

3. 25% straight rate of tax was imposed on the taxable income of AOP from tax year 2010 and

onward. Now it is withdrawn. The corresponding change in line with 1(a) above. 4. The rate of tax in the case of goods transport vehicles is increased from Re. 1/- per kilogram

laden weight to Rs. 5/- per kilogram 5. In the case of Passenger transport vehicles plying for hire with registered seating capacity of 20

person or more tax @ Rs. 100/- per seat per annum is increased to Rs. 500/- per seat per annum.

6. The rate of tax at the time of registration of new vehicle with engine capacity of 1301 cc to 1600

cc has been increased from Rs. 16,875/- to Rs. 25,000/-.


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2nd Schedule Exemptions and Tax Concessions Part I – Exemption from total income 1. Clause 23B– The amounts received as monthly installment from an income payment plan

invested out of the accumulated balance of an individual pension accounts with a pension fund manager or an approved annuity plan or another individual pension account of eligible person or the survivors pension account maintained with any other pension fund manager as specified in the Voluntary Pension System Rules 2005 shall be exempt from tax provided accumulated balance is invested for a period of ten years.

2. Clause 23C – Accumulated balance of provident fund transferred to approved pension fund

should be separately marked by the Pension Fund Manager and any withdrawal representing this marked balance should be exempt from tax and be treated as if that is withdrawn from provident fund and hence tax free.

3. Clause 61(ia) – Any amount paid as donation to “The Citizens Foundation” shall be admissible

for tax credit u/s 61 of the Income Tax Ordinance, 2001 subject to conditions of admissibility mentioned therein.

3. Clause 66(xxviii) – Any income derived by “The Citizens Foundation” shall be exempt from levy

of tax under this ordinance. 4. Clause 101 – The exemption period for Venture Capital Company and Venture Capital Fund

registered under Venture Capital Companies and Funds Management Rules, 2000 and a Private Equity and Venture Capital Fund has been increased from 30-06-2014 to 30-06-2024.

Part II – Reduction in tax rates 5. Proviso added in clause 9A – Clause 9A provided reduced 3% rate of tax on import of raw

material by an industrial undertaking for its own use, now the 3% rate of tax shall be applicable subject to production of an exemption certificate issued by the Commissioner.

Part IV – Exemption from specific provisions 6. New Clause (11B) - The provisions of section 150 (Dividend) shall not apply in respect of inter-

corporate dividend within the group companies entitled to group taxation and group relief under section 59AA or section 59B respectively.

7. New clause (11C) – The provisions of section 151 (Profit on debt) shall not apply in respect of

inter-corporate profit on debt within the group companies entitled to group taxation and group relief under section 59AA or section 59B respectively.

8. Clause (16A) – The provisions of section 153(1)(b) were not applicable to the news print media

services in respect of the advertising services. Now the Finance Act, 2012 extended the scope to the electronic media in addition to print media.


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9. New Clause (41A) – The commercial importers may opt for normal tax regime subject to the

condition that minimum tax liability under normal tax regime shall not be less than 60% of tax already paid at import stage.

10. New Clause (41AA) - The exporters may opt for normal tax regime subject to the condition that

minimum tax liability under normal tax regime shall not be less than 50% of the tax already paid on export transactions u/s 154.

11. New Clause (41AAA) - The supplier of goods may opt for normal tax regime subject to the

condition that minimum tax liability under normal tax regime shall not be less than 70% of tax already deducted under clause (a) of sub-section (1) of section153.

12. Clause (47B) – Gain on sale of securities shall be exempt from tax in the hands of National

Investment Unit Trust or a collective investment scheme or a modaraba or Approved Pension Fund or an Approved Income Payment Plan or a REIT Scheme or a Private Equity and Venture Capital Fund or a recognized provident fund or an approved superannuation fund or an approved gratuity fund.

13. Clause (56)(iii) – Goods temporarily imported into Pakistan for subsequent exportation and

which are exempt from customs duty and sales tax under Notification S.R.O 492(I)/2009 dated June 13, 2009 shall be exempt from tax. The Finance Act, 2012 only changed the SRO number 1065(I)/2005, dated 20-10-2005 with S.R.O 492(I)/2009 dated June 13, 2009.

14. Omitted Clause (76) – The provisions of section 235 were not applicable to an industrial

undertaking which was manufacturer-cum-exporter, and situated in Karachi Export Processing Zone, which has been declared by the Federal Government as a “Zone” within the meaning of the Export Processing Zone Authority Ordinance 1980.

15. Clause (77) – Provisions of section 148 and 153 were not applicable on import and subsequent

supply of items with dedicated use of renewable sources of energy including PV modules alongwith the related components including invertors, charge controllers and batteries. The Finance Act, 2012 exempted the application of provisions of 148 & 153 on import of PV modules with or without components.

3rd Schedule Depreciation 1. The rate of initial allowance on building is reduced from 50% to 25%.


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4th Schedule Rules for the computation of the profits and gains of insurance business 1. Rule 6B – The rates of capital gains on disposal of shares by insurance company has been

decreased in the following manner: Holding less than six months: Tax year 2012: 12.5% to 10%, Tax year 2013: 15.0% to 12.5%, Tax

year 2014: 17.5% to 15%. Holding for six months or more: Tax year 2012: 8.5% to 8%, Tax year 2013: 9.0% to 8.5%, Tax

year 2014: 9.5% to 9%, Tax year 2015: 10.0% to 9%. 5th Schedule Rules for the computation of the profits and gains from the exploration and production of petroleum 1. New Rule sub-rule (4A) of Rule 4 – A person, for tax year 2012 and onward, may opt to pay tax

@ 45% of the profits and gains, net of royalty, derived by a petroleum exploration and production undertaking, provided that this option shall be available subject to withdrawal of appeals, references and petitions on the issue of tax rate pending before any appellate forum and payment of whole of the outstanding tax liability created under Income Tax Ordinance, 2001 upto Tax Year 2011, by the 30th June, 2012. This is an irrevocable one time option.

7th Schedule Rules for the computation of the profits and gains of a banking company and tax payable thereon 1. New 3rd proviso in Rule 6 – The dividend received from Money Market Funds and Income Funds

shall be taxed @ 25% for tax year 2013 and @ 35% for tax years 2014 and onwards 8th Schedule Proposed Rules for the computation of capital gain on listed securities For commentary please see Point 1 of Income Tax Section.

*******************


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SALES TAX

1. Assessment of Tax and recovery of tax not levied or short-levied or erroneously refunded

[Section11]

Substituted section 11, the substituted section is the combination of existing sections 11 and 36

of the Sales Tax Act, 1990. All sub-sections of the existing sections 11 & 36 have been merged

and re-arranged to clarify the concept of assessment.

2. Recovery of tax not levied or short-levied or erroneously refunded [Section36]

Omit section 36 in line with merger of section 36 with section 11.

3. Zero-ration-Fifth Schedule

Withdrawn zero-ration facility on supplies against international tenders by omitting serial # 4

and entries relating thereto in column (2) of the fifth Schedule of the Sales Tax Act, 1990. The

same has been inserted in Sixth Schedule to exempt these supplies from sales tax.

4. Following PCT Heading Nos. have been substituted in column (1) and column (3) of Table-I of

the Sixth Schedule of the Sales Tax Act, 1990.

Serial # Old PCT Heading Nos. of the First Schedule to the Customs Act, 1969 (IV of 1969)

Substituted Heading Nos. of the First Schedule to the Customs Act, 1969 (IV of 1969)

(1) (2) (3)

1 0101.1000

0101.2100 and 0101.3100

0102.1020

0102.2110

0102.1030

0102.2120

0102.1040

0102.2130

0102.1090

0102.2190

0102.9010

0102.3900

0102.9020.

0102.2910

0102.9030

0102.2920

0102.9040

0102.2930

0102.9090 0102.2990, 0102.9000

11 0407.0010.

0407.1100, 0407.1900

0407.0090

0407.2100, 0407.2900


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0808.2000

0808.3000, 0808.4000

16

0904.2010

0904.2110

0904.2020

0904.2210

31 . 8523.4010

8523.4910

70 8523.4030 8523.4090

8523.4920 8523.4190

Amendments in Table-II of the Sixth Schedule. S # Description Heading Nos. of the First

Schedule to the Customs Act, 1969 (IV of 1969)

2

“Other than cotton seed” proposed to be added after the word seed. It means exemption will not be available on cotton seed.

12 “Supplies against international tender” added in newly inserted serial number 12. It means these supplies are exempt. Previously these supplies are zero-rated.

Respective headings


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FEDERAL EXCISE DUTY 1. Definitions [Section 2(12)(12A)]

Renumber clause (12A) of section 2 as clause (12). 2. FIRST SCHEDULE

TABLE I (EXCISABLE GOODS)

S. No.

Description of goods Heading/sub-heading Number

Rate of duty Amendment

Notes

9. Locally produced cigarettes if their retail price exceeds twenty one rupees twenty two rupees and eighty six paisas per ten cigarettes.

24.02

Sixty five per cent of the retail price

Increased substituted entries at S. No. 9, 10 and 11 of Table-I in the First Schedule to provide for enhanced rates of duty on locally produced cigarettes.

10. Locally produced cigarettes if their retail price exceeds eleven rupees and fifty paisa thirteen rupees and thirty six paisas per ten cigarettes but does not exceed twenty one rupees twenty two rupees and eighty six paisas per ten cigarettes.

24.02

Six rupees and four paisa Seven rupees and two paisa per ten cigarettes plus seventy per cent per incremental rupee or part thereof.

Increased

11. Locally produced cigarettes if their retail price does not exceed eleven rupees and fifty paisa thirteen rupees and thirty six paisas per ten cigarettes.

24.02

Six rupees and four paisa Seven rupees and two paisa per ten cigarettes

Increased Substituted entries at S. No. 9, 10 and 11 of Table-I in the First Schedule to provide for enhanced rates of duty on locally produced cigarettes.


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13. Portland cement, aluminous cement, slag cement, super sulphate cement and similar hydraulic cements, whether or not colored or in the form of clinkers

25.23 Five four hundred rupees per metric ton.

Decreased Amended S. No. 13 of Table-I in the First Schedule to substitute the word “four” for “five” to provide for lower rate of duty on cement

22. Lubricating oil in packs not exceeding 10 liters

2710.1951 Ten per cent of the retail price.

Omitted. Abolished FED on lubricating oil

23. Lubricating oil in packs exceeding 10 litres

2710.1952 Ten per cent of the retail price

Omitted Abolished FED on lubricating oil

24. Lubricating oil in bulk (vessels, boozers, lorries etc.)

2710.1953 Seven rupees and fifteen paisa per liter.


25. Lubricating oil manufactured from reclaimed oils or sludge or sediment, subject to the condition if sold in retail packing or under brand names the words manufactured from reclaimed oil or sludge or sediment should be clearly printed on the pack

Respective headings

Two rupee per liter.


27. Base lube oil 2710.1993 Seven rupees and fifteen paisa per liter.

Omitted Abolished FED on base lube oil

42. Perfume and toilet wares:

3303.0000 Ten per cent of retail

Omitted Abolish FED on perfume


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price if packed in retail packing and ten per cent ad valorem if in bulk.

and toilet wares

43. Beauty or make-up preparations and preparations for the care of the skin (other than medicaments), including sunscreen or sun tan preparations; manicure or pedicure preparations.

33.04 Ten per cent of retail price if packed in retail packing and ten per cent ad valorem if in bulk.

Omitted Abolish FED on beauty or make-up preparations etc

44. Preparations for use on the hair excluding herbal hair oil and kali mehndi


Omitted Abolished FED on preparations for use hair etc

45. Pre-shave, shaving or after-shave preparations, personal deodorants, bath preparations, depilatories and other perfumery, cosmetic or toilet preparations, not elsewhere specified or included; prepared room deodorisers, whether or not perfumed or having disinfectant properties


Omitted Abolished FED on pre and after shaving, cosmetic or toilet preparations etc


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(excluding agarbatti and other odoriferous preparations which operate by burning).

50. Filter rods for cigarettes

5502.0090 Twenty per cent ad val.

Omitted Abolished FED on filter rods for cigarettes.

Restrictions

EXISTING AMENDED NOTES

T A B L E I, * * R E S T R I C T I O N

Restriction.— For the purpose of levy, collection and payment of duty at the rates specified in column (4) against serial numbers 9, 10 and 11, no cigarette manufacturer shall reduce price from the level adopted on the day of the announcement of the Budget 2011-12.

T A B L E I * * R E S T R I C T I O N

Restriction.— (1) For the purpose of levy, collection and payment of duty at the rates specified in column (4) against serial numbers 9, 10 and 11, no cigarette manufacturer shall reduce price from the level adopted on the day of announcement of the latest Budget. (2) Variants at different price points. – No manufacturer or importer of cigarette can introduce or sell a new cigarette brand variant of the same existing brand family at a price lower than the lowest actual price of the existing variant of the same brand family. For the purposes of this restriction, current minimum price variant of existing brand means the lowest price of a brand variant on the day of announcement of Budget 2012-13. (3) Minimum Price of New Brands. – Any new brand introduced in the market

Amended the Restriction at the end of Table-I in First Schedule to add new conditions regarding variant and different price points and minimum price of new brands”.


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shall not be priced and sold lower than 5% below the price of the Most Popular price Category (MPPC). MPPC is the price point at which the highest number of excise tax paid cigarettes are sold in the previous fiscal year.‖

11. TABLE II (EXCISABLE SERVICES)

Sr. # Description of goods Heading/sub-heading Number

Rate of duty Notes

3. Facilities for travel 98.03

(a) Services provided or rendered in respect of travel by air of passenger within the territorial jurisdiction of Pakistan

9803.1000 Sixteen per cent of the charges plus rupees twenty sixty per ticket.

Amend S. No. 3 of Table-II in the First Schedule to revise rate of FED on international travelling from Pakistan.

(b) services provided or rendered in respect of travel by air of the passengers embarking on international journey to or from Pakistan

9803.1100

Charge of duty limited only on services in respect of travel by air of the passengers embarking on international journey from Pakistan.

(i) Economy and economy plus

Three thousand eight hundred and forty rupees

(ii) Club, business and first class.

Six thousand eight hundred and forty rupees


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12. THIRD SCHEDULE

Amended

Sr. # Description of Goods

Heading/Sub-heading Number

Sr. # Description of Goods

Heading/Sub-heading Number

Notes

New insertion 7 Live stock insurance

9813.1600

Exempted FED on services in respect of livestock insurance.

New insertion 8 Services provided by Asset Management Companies with effect from 1st of July, 2007.

Respective headings

Exempted FED on services in respect of Asset Management Companies.

**************************************

This document contains comments, which represent our interpretation and point of view, and it is recommend that while considering their application to any particular case, reference be made to the specific wordings of the relevant statutes. Further we accept no responsibility or liability for any losses occasioned as a result of reliance on the information included in this document.

SOFTAX’S SOLUTION TEAM


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Comparison of Tax Liability for Business Individual

Annexure 'A'

S. # Taxable Income

Tax Liability Increase / (Decrease)

S. # Taxable Income


TY: 2012

TY: 2013 TY: 2012 TY: 2013

1 400,000 30,000 - (30,000) 27 1,900,000 475,000 227,500 (247,500)

2 410,000 30,750 1,000 (29,750) 28 2,000,000 500,000 247,500 (252,500)

3 420,000 31,500 2,000 (29,500) 29 2,100,000 525,000 267,500 (257,500)

4 430,000 32,250 3,000 (29,250) 30 2,200,000 550,000 287,500 (262,500)

5 440,000 33,000 4,000 (29,000) 31 2,300,000 575,000 307,500 (267,500)

6 450,000 33,750 5,000 (28,750) 32 2,400,000 600,000 327,500 (272,500)

7 475,000 35,625 7,500 (28,125) 33 2,500,000 625,000 347,500 (277,500)

8 500,000 37,500 10,000 (27,500) 34 2,600,000 650,000 372,500 (277,500)

9 550,000 55,000 15,000 (40,000) 35 2,700,000 675,000 397,500 (277,500)

10 600,000 60,000 20,000 (40,000) 36 2,800,000 700,000 422,500 (277,500)

11 650,000 65,000 25,000 (40,000) 37 2,900,000 725,000 447,500 (277,500)

12 700,000 70,000 30,000 (40,000) 38 3,000,000 750,000 472,500 (277,500)

13 750,000 75,000 35,000 (40,000) 39 3,100,000 775,000 497,500 (277,500)

14 800,000 120,000 42,500 (77,500) 40 3,200,000 800,000 522,500 (277,500)

15 850,000 127,500 50,000 (77,500) 41 3,300,000 825,000 547,500 (277,500)

16 900,000 135,000 57,500 (77,500) 42 3,400,000 850,000 572,500 (277,500)

17 950,000 142,500 65,000 (77,500) 43 3,500,000 875,000 597,500 (277,500)

18 1,000,000 150,000 72,500 (77,500) 44 3,600,000 900,000 622,500 (277,500)

19 1,100,000 220,000 87,500 (132,500) 45 4,000,000 1,000,000 722,500 (277,500)

20 1,200,000 240,000 102,500 (137,500) 46 4,500,000 1,125,000 847,500 (277,500)

21 1,300,000 260,000 117,500 (142,500) 47 5,000,000 1,250,000 972,500 (277,500)

22 1,400,000 280,000 132,500 (147,500) 48 5,500,000 1,375,000 1,097,500 (277,500)

23 1,500,000 300,000 147,500 (152,500) 49 6,000,000 1,500,000 1,222,500 (277,500)

24 1,600,000 400,000 167,500 (232,500) 50 6,500,000 1,625,000 1,347,500 (277,500)

25 1,700,000 425,000 187,500 (237,500) 51 7,000,000 1,750,000 1,472,500 (277,500)

26 1,800,000 450,000 207,500 (115,000) 52 7,500,000 1,875,000 1,597,500 (277,500)


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Comparison of Tax Liability for Salaried Taxpayers on the basis of rates proposed in Finance Bill, 2012 (Now abolished)

Annexure 'B'

S. # Taxable Salary

Tax Liability Increase / (Decrease) S. #

Taxable Salary

Tax Liability Increase / (Decrease) TY: 2012 TY: 2013 TY: 2012 TY: 2013

1 400,000 6,000 - (6,000) 27 1,900,000 266,000 152,500 (113,500)

2 410,000 8,000 500 (7,500) 28 2,000,000 293,000 167,500 (125,500)

3 420,000 10,000 1,000 (9,000) 29 2,100,000 315,000 182,500 (132,500)

4 430,000 10,750 1,500 (9,250) 30 2,200,000 320,000 197,500 (122,500)

5 440,000 11,000 2,000 (9,000) 31 2,300,000 362,500 212,500 (150,000)

6 450,000 11,250 2,500 (8,750) 32 2,400,000 384,000 227,500 (156,500)

7 475,000 16,250 3,750 (12,500) 33 2,500,000 400,000 242,500 (157,500)

8 500,000 17,500 5,000 (12,500) 34 2,600,000 416,000 262,500 (153,500)

9 550,000 19,250 7,500 (11,750) 35 2,700,000 432,000 282,500 (149,500)

10 600,000 27,000 10,000 (17,000) 36 2,800,000 448,000 302,500 (145,500)

11 650,000 29,250 12,500 (16,750) 37 2,900,000 481,000 322,500 (158,500)

12 700,000 42,000 15,000 (27,000) 38 3,000,000 525,000 342,500 (182,500)

13 750,000 45,000 17,500 (27,500) 39 3,100,000 542,500 362,500 (180,000)

14 800,000 60,000 22,500 (37,500) 40 3,200,000 560,000 382,500 (177,500)

15 850,000 63,750 27,500 (36,250) 41 3,300,000 577,500 402,500 (175,000)

16 900,000 67,500 32,500 (35,000) 42 3,400,000 595,000 422,500 (172,500)

17 950,000 82,500 37,500 (45,000) 43 3,500,000 612,500 442,500 (170,000)

18 1,000,000 90,000 42,500 (47,500) 44 3,600,000 646,250 462,500 (183,750)

19 1,100,000 110,000 52,500 (57,500) 45 4,000,000 740,000 542,500 (197,500)

20 1,200,000 120,000 62,500 (57,500) 46 4,500,000 832,500 642,500 (190,000)

21 1,300,000 143,000 72,500 (70,500) 47 5,000,000 1,000,000 742,500 (257,500)

22 1,400,000 154,000 82,500 (71,500) 48 5,500,000 1,100,000 842,500 (257,500)

23 1,500,000 179,500 92,500 (87,000) 49 6,000,000 1,200,000 942,500 (257,500)

24 1,600,000 200,000 107,500 (92,500) 50 6,500,000 1,300,000 1,042,500 (257,500)

25 1,700,000 212,500 122,500 (90,000) 51 7,000,000 1,400,000 1,142,500 (257,500)

26 1,800,000 252,500 137,500 (115,000) 52 7,500,000 1,500,000 1,242,500 (257,500)


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Comparison of Tax Liability for AOP

Annexure 'C'

S. # Taxable Income


S. # Taxable Income


TY: 2012

TY: 2013 TY: 2012 TY: 2013

1 100,000 25,000 - (25,000) 27 1,900,000 475,000 227,500 (247,500)

2 200,000 50,000 - (50,000) 28 2,000,000 500,000 247,500 (252,500)

3 300,000 75,000 - (75,000) 29 2,100,000 525,000 267,500 (257,500)

4 400,000 100,000 - (100,000) 30 2,200,000 550,000 287,500 (262,500)

5 425,000 106,250 2,500 (103,750) 31 2,300,000 575,000 307,500 (267,500)

6 450,000 112,500 5,000 (107,500) 32 2,400,000 600,000 327,500 (272,500)

7 475,000 118,750 7,500 (111,250) 33 2,500,000 625,000 347,500 (277,500)

8 500,000 125,000 10,000 (115,000) 34 2,600,000 650,000 372,500 (277,500)

9 550,000 137,500 15,000 (122,500) 35 2,700,000 675,000 397,500 (277,500)

10 600,000 150,000 20,000 (130,000) 36 2,800,000 700,000 422,500 (277,500)

11 650,000 162,500 25,000 (137,500) 37 2,900,000 725,000 447,500 (277,500)

12 700,000 175,000 30,000 (145,000) 38 3,000,000 750,000 472,500 (277,500)

13 750,000 187,500 35,000 (152,500) 39 3,100,000 775,000 497,500 (277,500)

14 800,000 200,000 42,500 (157,500) 40 3,200,000 800,000 522,500 (277,500)

15 850,000 212,500 50,000 (162,500) 41 3,300,000 825,000 547,500 (277,500)

16 900,000 225,000 57,500 (167,500) 42 3,400,000 850,000 572,500 (277,500)

17 950,000 237,500 65,000 (172,500) 43 3,500,000 875,000 597,500 (277,500)

18 1,000,000 250,000 72,500 (177,500) 44 3,600,000 900,000 622,500 (277,500)

19 1,100,000 275,000 87,500 (187,500) 45 4,000,000 1,000,000 722,500 (277,500)

20 1,200,000 300,000 102,500 (197,500) 46 4,500,000 1,125,000 847,500 (277,500)

21 1,300,000 325,000 117,500 (207,500) 47 5,000,000 1,250,000 972,500 (277,500)

22 1,400,000 350,000 132,500 (217,500) 48 5,500,000 1,375,000 1,097,500 (277,500)

23 1,500,000 375,000 147,500 (227,500) 49 6,000,000 1,500,000 1,222,500 (277,500)

24 1,600,000 400,000 167,500 (232,500) 50 6,500,000 1,625,000 1,347,500 (277,500)

25 1,700,000 425,000 187,500 (237,500) 51 7,000,000 1,750,000 1,472,500 (277,500)

26 1,800,000 450,000 207,500 (115,000) 52 7,500,000 1,875,000 1,597,500 (277,500)


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Comparison of Tax Liability for Salaried Taxpayers on the basis of newly substituted rates of taxes Annexure 'D'

S. # Taxable Salary

Increase / (Decrease) S. #

Taxable Salary

Increase / (Decrease)

TY: 2013 Proposed

TY:2013 Actual

TY: 2013 Proposed

TY: 2013 Actual

1 400,000 - - - 27 1,900,000 152,500 155,000 2,500

2 410,000 500 500 - 28 2,000,000 167,500 170,000 2,500

3 420,000 1,000 1,000 - 29 2,100,000 182,500 192,500 10,000

4 430,000 1,500 1,500 - 30 2,200,000 197,500 210,000 12,500

5 440,000 2,000 2,000 - 31 2,300,000 212,500 227,500 15,000

6 450,000 2,500 2,500 - 32 2,400,000 227,500 245,000 17,500

7 475,000 3,750 3,750 - 33 2,500,000 242,500 262,500 20,000

8 500,000 5,000 5,000 - 34 2,600,000 262,500 440,000 177,500

9 550,000 7,500 7,500 - 35 2,700,000 282,500 460,000 177,500

10 600,000 10,000 10,000 - 36 2,800,000 302,500 480,000 177,500

11 650,000 12,500 12,500 - 37 2,900,000 322,500 500,000 177,500

12 700,000 15,000 15,000 - 38 3,000,000 342,500 520,000 177,500

13 750,000 17,500 17,500 - 39 3,100,000 362,500 540,000 177,500

14 800,000 22,500 22,500 - 40 3,200,000 382,500 560,000 177,500

15 850,000 27,500 27,500 - 41 3,300,000 402,500 580,000 177,500

16 900,000 32,500 32,500 - 42 3,400,000 422,500 600,000 177,500

17 950,000 37,500 37,500 - 43 3,500,000 442,500 620,000 177,500

18 1,000,000 42,500 42,500 - 44 3,600,000 462,500 640,000 177,500

19 1,100,000 52,500 52,500 - 45 4,000,000 542,500 720,000 177,500

20 1,200,000 62,500 62,500 - 46 4,500,000 642,500 820,000 177,500

21 1,300,000 72,500 72,500 - 47 5,000,000 742,500 920,000 177,500

22 1,400,000 82,500 82,500 - 48 5,500,000 842,500 1,020,000 177,500

23 1,500,000 92,500 92,500 - 49 6,000,000 942,500 1,120,000 177,500

24 1,600,000 107,500 110,000 2,500 50 6,500,000 1,042,500 1,220,000 177,500

25 1,700,000 122,500 125,000 2,500 51 7,000,000 1,142,500 1,320,000 177,500

26 1,800,000 137,500 140,000 2,500 52 7,500,000 1,242,500 1,420,000 177,500


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