Amendments in Tax Laws, a taxpayer should now before filing income tax return for tax year 2015

Important amendments made in the Income Tax Ordinance 2001 through Finance Act 2015

 
 
 
 
 
 
S. #
Section
Description
 
 
 
1
2(28) and 4B
Every person having income of Rs.50 crore or Rs.500 million is required to pay super tax @ 4% for banking companies and 3% for non-banking companies.
 
 
 
2
5A
10% tax is payable by every public companies, other than those which are exempt u/c 132(1), modaraba companies and scheduled banks, which failed to distribute dividend out of the profits earned for the year and the reserves of the company exceeds 100% of the share capital. The said amount of reserves in excess of its paid up capital shall be treated as income of the company and will be taxed at the rate of ten percent.
 
 
 
3
7B
Through Finance Act 2015 three slabs are introduced for non-corporate taxpayers earning profit on debts as under:
 
 
 
 
 
 
 
 
 
 
 
Upto Rs.25 million 10%
 
 
 
 
 
Exceeding 25 million and below 50 million 2.5 million + 12.5%
 
 
 
 
 
Exceeding 50 m and above 5.625 m + 15%
 
 
 
 
 
 
 
 
 
 
 
Prior to 2015, tax deducted on profit on debt was final for non-corporate taxpayers. For corporate taxpayers there is no change and tax is chargeable at normal rate.
 
 
 
4
37A
Earlier, profit earned on securities held for less than 24 months was taxable. Now, the tax is also leviable on the securities held for more than 24 months and less than four years. Securities held for more than four years shall be exempt.
 
 
 
5
214D
Automatic selection. The taxpayers who do not file return within stipulated time or have not paid tax due along with the return by the due date would be automatically selected for audit. Automatic selection could be avoided if a taxpayer may file return within 90 days fulfilling the following criteria:
 
 
 
 
 
 
 
 
 
 
 
i.�������������������� Pay tax 25% higher from the preceding year
 
 
 
 
 
ii.������������������ Where no taxable income declared in the preceding year @ 2% of the total turnover.
 
 
 
 
 
Fulfilling this condition does not exonerate any taxpayer from selection by the Board u/s 214C.
 
 
 
6
15A
Nomenclature of deduction under the head �Collection charges� has been changed as �any expenditure including administration and collection charges�. The rate of deduction would remain 6% of the gross rent.
 
 
 
7
147(4A)
Earlier, a taxpayer who thinks that his tax liability for upcoming year is less, could file an estimate u/s 147(4) before the date of last installment. New section 147(4A) required a person whose anticipated liability is more than the liability payable u/s 147 to file estimate before 2nd installment is due. He should also pay at least 50% of the anticipated liability at the higher rate.
 
 
 
8
148
Tax rates with respect to import of gold, LPG on behalf of the government, cotton, urea, pulses etc. have been revised.
 
 
 
9
177, 2011, 121
Concept of Audit panel consisting of Inland Revenue Officer, Cost Accountant/CA firm or any other person appointed by the Board. The panel should conduct special audit.
 
 
 
10
114(6)(ba)
Now a person could revise return of income without approval of the CIR within 60 days from filing of return.
 
 
 
11
128(1AA)
Now Commissioner Appeals may extend a period of stay not exceeding 30 days. The Further stay should be conditional to deciding the man appeal within next 30 days.
 
 
 
12
231B
Rate of Token tax and tax payable on transfer of vehicle changed.
 
 
 
 
 
 
 
 
 
S. No
 
Engine capacity
For Filers
 
For Non-Filer
1
 
Upto 1000 cc
800
 
1,200
2
 
1001cc to 1199 cc
1,500
 
4,000
3
 
1200cc to 1299 cc
1,750
 
5,000
4
 
1300cc to 1499cc
2,500
 
7,500
5
 
1500cc to 1599cc
3,750
 
12,000
6
 
1600cc to 1999cc
4,500
 
15,000
7
 
2000cc and above
10,000
 
30,000
 
 
 
 
 
 
12
236Q
Final Tax is chargeable on lease/rent of machinery and equipments @ 10%. Exemption is provided to the leasing companies, banks, financial institutions etc as well as agricultural equipment.
 
 
 
 
236A
Pakistan Mercantile Exchange Limited is required to collect tax @ 0.5% on sale/purchase of future contracts. The tax is adjustable.
 
 
 
13
235A
On domestic electricity connection tax is deductible @ 7.5% if the monthly bill exceeds Rs.75,000. Earlier, the limit was Rs.100,000
 
 
 
14
236L
International Air tickets the rate of tax deduction shall be:
 
 
 
 
 
 
 
 
 
 
 
First class 16000
 
 
 
 
 
Economy and others 12000
 
 
 
15
150
Tax on dividend for 2016
 
 
 
 
 
Filers Non-filers
 
 
 
 
 
Normal 12.5% 17.5%
 
 
 
 
 
Mutual funds 10%
 
 
 
16
137
Time of payment of liability created through an order is extended to 30 days.
 
 
 
17
122C
Period of payment of tax liability as a result of provisional assessment u/s 122C is reduced to 45 days.
 
 
 
18
154
The exporters are allowed to opt out of FTR but the tax deducted u/s 154 shall be treated as minimum tax for the purpose of export income.
 
 
 
19
171
Rate of additional payment on delayed refund is revised from 15% to Kibor + 0.5%
 
 
 
20
205
Rate of default surcharge is reduced from 18% to 12%
 
 
 
21
236
Internet bills are subjected to adjustable advance tax @ 14%.
 
 
 
22
153
Exemption from deduction of tax under section 153(1)(b) available to electronic and print media in respect of the advertising services has also been withdrawn
 
 
 
 
 
 
 
 
 
23
Reduced tax rates
For companies (other than banks) in tax year 2015 the tax rate shall be 33% and in 2016 32%.
 
 
 
24
65B
Tax credit will be available to the companies commencing business with effect from 1.7.15 to 30.6.18 by reducing the rate of tax by 1% for every 50 employees provided that the credit should not exceed 10% of the total tax liability. Employees should be registered with EOBI and Social security etc.
 
 
 
25
65B
Credit of tax u/s 65B is extended to 30.06.2016
 
 
 
26
65C
Earlier the tax credit @ 15% was allowable to companies who opt out to register in any of the stock exchange in Pakistan. For tax year 2016 the credit is enhanced to 20%.
 
 
 
27
2(59A)
Companies having paid up capital up to 50 million are also included in the definition of small companies, which are liable to pay tax @ 25%. Earlier the paid up capital limit was Rs.25 million.
 
 
 
28
236P
A new section has been introduced to levy tax @ 0.6% (reduced to 0.3% till 30.09.2015) on all banking transactions. The tax is not chargeable in respect of filers.
 
 
 
29
113A
Levy of minimum tax on builders has been suspended till 30.06.2018
 
 
 
30
Clause (126I)
Prior exemption on import of solar/wind energy goods/equipments was available. Through Finance Act, 2015 tax exemption for a period of five years (from 1st July, 2015 to 30th June, 2020) has been allowed to a taxpayer deriving profit and gains from industrial undertaking engaged in manufacturing of plant, machinery, equipment and items with dedicated use for generation of renewable energy from solar and wind which are set up by 31 December, 2016. Exemption from minimum tax under section 113 of the Ordinance is also allowed.
 
 
 
31
126J
Tax exemption is allowed to cold storages set up between 1.7.2015 to 30.06.2016 engaged in the storage of agricultural products.
 
 
 
32
126K
Halal meet production units � Four years exemption on normal income, minimum tax and tax u/s 154
 
 
 
33
126L
Manufacturing units in KPK � Five years tax holidays.
 
 
 
34
Clause (IIA) Part III 2nd Schedule
No minimum tax is payable by rice manufacturers for tax year 2015.
 
 
 
 
 
 
 
 
 
35
Clause (91) Part IV of the Second Schedule
Tax exemption has been granted on import of agriculture machinery through Finance Act, 2015
 
 
 
 
 
 
 
 
 
36
SRO
Every salaries person earning taxable salary is required to file his annual return online using iris.fbr.gov.pk portal.
 
 
 
37
SRO
Active Taxpayers Unit is proposed to be up dated after every 7 days.
 
 
 

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