GOVERNMENT
OF PAKISTAN
CENTRAL BOARD OF
REVENUE
*****
|
No.F.1-167(1)ITP/2001-EC/SAL |
Islamabad,
the July 4, 2001 |
(Income
Tax)
Subject:
COMPUTATION OF INCOME TAX
PAYABLE BY SALARIED PERSONS FOR ASSESSMENT YEAR 2001-2002 AND DEDUCTION FROM
SALARY FOR INCOME YEAR COMMENCING ON 1ST JULY
2001.
The tax payable by salaried persons i.e. where salary constitutes more
than 50% of the total income from all sources for the assessment year 2001-2002
(income year 2000-01) shall be computed in accordance with rates given in para A
of the First Schedule to the Income Tax Ordinance, 1979. The taxpayers would be entitled to the
reduction in tax liability as given in clause (1B) of Part-III of the Second
Schedule to the Income Tax Ordinance.
Similarly, tax credit of Rs.2,500 is also admissible for the assessment
year 2001-2002 (income year 2000-01).
DEDUCTION OF TAX UNDER
SECTION 50(1) FROM SALARY FOR INCOME YEAR COMMENCING ON 1ST JULY
2001.
2.
Employers while paying salary shall deduct tax from salaries of the
employees w.e.f. 1st July 2001 at the new rates given in Para A1 of
Part-I of the First Schedule to the Income Tax Ordinance. The following are the new
rates:
(1) where
the total income
Nil
does not exceed
Rs.60,000
(2) where
the total income
7.5% of the
exceeds Rs.60,000 but does
amount exceeding
not exceed Rs.150,000
Rs.60,000;
(3) where
the total income
Rs.6,750 plus 12.5%
exceeds Rs.150,000 but does
of the amount
not exceed Rs.300,000
exceeding Rs.150,000;
(4) where
the total income
Rs.25,500 plus 20%
exceeds Rs.300,000 but does
of the amount
not exceed Rs.400,000
exceeding Rs.300,000;
(5) where
the total income
Rs.45,500 plus 25%
exceeds Rs.400,000
of the amount
but does not exceed
exceeding Rs.400,000.
Rs.700,000.
(6) where
the total income
Rs.120,500 plus 35%
exceeds Rs.700,000
of the amount
exceeding Rs.700,000.
3.
Salaried taxpayers are entitled to the following reduction in tax
liability (income year 2001-02) under clause (1B) of Part-III of the Second
Schedule to the Income Tax Ordinance:
|
S.No. |
Income
Slab |
Reduction in tax
liability |
|
1. |
Where income exceeds
Rs.60,000 but does
not exceed
Rs.80,000 |
70% |
|
2. |
Where income exceeds
Rs.80,000 but does
not exceed
Rs.100,000 |
60% |
|
3. |
Where income exceeds
Rs.100,000 but does
not exceed
Rs.150,000 |
50% |
|
4. |
Where income exceeds
Rs.150,000 but does
not exceed
Rs.200,000 |
40% |
|
5. |
Where income exceeds
Rs.200,000 but does
not exceed
Rs.300,000 |
30% |
|
6. |
Where income exceeds
Rs.300,000 but does
not exceed
Rs.500,000 |
20% |
|
7. |
Where income exceeds
Rs.500,000 but does
not exceed
Rs.1,000,000 |
10% |
|
8. |
Where income exceeds
Rs.1,000,000. |
5% |
4.
A further relief equal to 50% in tax liability is admissible under
paragraph (2) of clause (1B) of Part-III of Second Schedule, subject to the
conditions mentioned therein.
5.
Taxpayers having income from agriculture exceeding Rs.80,000 would not be
entitled to the basic exemption of Rs.60,000. For them a separate rate structure has
been provided in clause (a) of proviso to newly inserted para A1 in Part-I of
First Schedule to the Ordinance.
6.
The following examples illustrate the computation of tax of salaried
persons for the assessment year 2002-03 and tax shall be deducted under section
50(1) accordingly, by the employers w.e.f. 1st July
2001:
Example –
1.
(Figures in Rupees)
-Salary
=
120,000
-Tax (on the amount
exceeding
Rs.60,000)
@ 7.5%.
=
4,500
Less: 50% reduction as
per clause (1B) of
Part-III of 2nd Schedule.
=
2,250
Tax payable
=
2,250
Tax deductible per
month.
=
188
Example –
2.
-Salary
=
500,000
-Perquisites
=
350,000
Total
=
850,000
Tax on Rs.700,000
=
120,500
Tax on balance
Rs.150,000 @ 35%.
=
52,500
Total Tax
=
173,000
Less: 10% reduction in
tax as per clause (1B) of
Part-III of 2nd Schedule.
=
17,300
Annual tax payable.
=
155,700
Tax deductible per month
by employers.
=
12,975
Example –
3.
-Salary
=
1,000,000
-Perquisites
=
600,000
Total Income
=
1,600,000
Tax on Rs.700,000
=
120,500
Tax on balance
Rs.900,000 @ 35%.
=
315,000
Tax
=
435,500
Less: 5% reduction in
tax as per clause (1B) of
Part-III of 2nd Schedule.
=
21,775
______
Tax payable.
=
413,725
Tax deductible per month
by employer.
=
34,477
(ABDUL
HAMID)
SECRETARY (IT
POLICY)
Ph:9203993