The dividend received from Money Market Funds and Income Funds is taxable at the rate of 25 percent for Tax Year 2013 and onwards. The FBR has issued a circular to explain the amendment made in the Seventh Schedule of the Income Tax Ordinance 2001 through the Finance Act 2013. The FBR said the rate of initial allowance under section 23 for plant and machinery has been reduced to 25 percent from 50 percent under Finance Act 2013.
In Second Schedule to the Income Tax Ordinance, 2001 some of the amendments made are as follows: In Part-I sub-clause (i) of clause (53A) has been deleted. Now the perquisite of free or concessional passage provided by airlines and transporters to its employee or to the members of employees household and dependants is to be included in taxable income of the employee. The market value of the fare at the relevant time shall be added to the income of the employee in case of free passage and the difference of the market value and the amount paid by the employee in case of concessional passage, circular said.
In Part-I a new clause (58A) has been added providing that income of a university or other educational institution being run by a non-profit organisation as defined in sub-section (36) of section 2 of the Income Tax Ordinance, 2001 existing solely for educational purposes and not for purposes of profit shall be exempt.
In Part-III in clause (1) a proviso has been added that the reduction in tax liability is available @ 2.5 percent on so much amount of the flying allowance or the submarine allowance as does not exceed an amount equal to the basic salary received by pilots, flight engineers, navigators of Pakistan Armed Forces, Pakistani Airlines or Civil Aviation Authority, Junior Commissioned Officers or other ranks of Pakistan Armed Forces, and submarine allowance by the officers of the Pakistan Navy, it said.
In Part-III in clause (2) reduction in tax liability of the tax payable on income from salary equal to 75 percent has been reduced to 40 percent in the case of: a full time teacher employed in a non profit educational institution duly recognised by Higher Education Commission, a Board of Education or a University recognised by the Higher Education Commission, including government training institutions.
In Part-III in clause (2) reduction in tax liability of the tax payable on income from salary equal to 75 percent has been reduced to 40 percent in the case of: a full time researcher employed in a research institution duly recognised by Higher Education Commission, a Board of Education or a University recognised by the Higher Education Commission, including government research institution.
It is further clarified that a full time teacher means a person employed purely for teaching and not performing any administrative or managerial jobs eg principals, headmasters, directors, vice-chancellors, chairmen, controllers etc. Similarly a full time researcher means a person purely employed for research job only in a research institution and such institution is purely performing research activities, the FBR said.
In Part-III in clause (59) the exemption from the applicability of Provisions of section 151 regarding withholding tax on profit on debt in the case of any resident individual on Defence Savings Certificates, Special Savings Certificates, Savings Accounts or Post Office Savings Accounts or Term Finance Certificates (TFCs), where such deposit does not exceed Rs 150,000 has been withdrawn. Now there is no threshold of invested amount for the purposes of withholding.
In Part-III, a new clause namely (72A) has been added providing that the provisions of clause (I) of section 21, sections 113 and 152 shall not apply in case of a Hajj Group Operator in respect of Hajj operations provided that the tax has been paid at the rate of Rs 3, 500 per Hajji for the tax year 2013 and Rs 5, 000 per Hajji for the tax year 2014 in respect of income from Hajj operations, the FBR added.
In Second Schedule to the Income Tax Ordinance, 2001 some of the amendments made are as follows: In Part-I sub-clause (i) of clause (53A) has been deleted. Now the perquisite of free or concessional passage provided by airlines and transporters to its employee or to the members of employees household and dependants is to be included in taxable income of the employee. The market value of the fare at the relevant time shall be added to the income of the employee in case of free passage and the difference of the market value and the amount paid by the employee in case of concessional passage, circular said.
In Part-I a new clause (58A) has been added providing that income of a university or other educational institution being run by a non-profit organisation as defined in sub-section (36) of section 2 of the Income Tax Ordinance, 2001 existing solely for educational purposes and not for purposes of profit shall be exempt.
In Part-III in clause (1) a proviso has been added that the reduction in tax liability is available @ 2.5 percent on so much amount of the flying allowance or the submarine allowance as does not exceed an amount equal to the basic salary received by pilots, flight engineers, navigators of Pakistan Armed Forces, Pakistani Airlines or Civil Aviation Authority, Junior Commissioned Officers or other ranks of Pakistan Armed Forces, and submarine allowance by the officers of the Pakistan Navy, it said.
In Part-III in clause (2) reduction in tax liability of the tax payable on income from salary equal to 75 percent has been reduced to 40 percent in the case of: a full time teacher employed in a non profit educational institution duly recognised by Higher Education Commission, a Board of Education or a University recognised by the Higher Education Commission, including government training institutions.
In Part-III in clause (2) reduction in tax liability of the tax payable on income from salary equal to 75 percent has been reduced to 40 percent in the case of: a full time researcher employed in a research institution duly recognised by Higher Education Commission, a Board of Education or a University recognised by the Higher Education Commission, including government research institution.
It is further clarified that a full time teacher means a person employed purely for teaching and not performing any administrative or managerial jobs eg principals, headmasters, directors, vice-chancellors, chairmen, controllers etc. Similarly a full time researcher means a person purely employed for research job only in a research institution and such institution is purely performing research activities, the FBR said.
In Part-III in clause (59) the exemption from the applicability of Provisions of section 151 regarding withholding tax on profit on debt in the case of any resident individual on Defence Savings Certificates, Special Savings Certificates, Savings Accounts or Post Office Savings Accounts or Term Finance Certificates (TFCs), where such deposit does not exceed Rs 150,000 has been withdrawn. Now there is no threshold of invested amount for the purposes of withholding.
In Part-III, a new clause namely (72A) has been added providing that the provisions of clause (I) of section 21, sections 113 and 152 shall not apply in case of a Hajj Group Operator in respect of Hajj operations provided that the tax has been paid at the rate of Rs 3, 500 per Hajji for the tax year 2013 and Rs 5, 000 per Hajji for the tax year 2014 in respect of income from Hajj operations, the FBR added.
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