Pakistan Tax

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Income Tax Return Filing:
Income Tax Return Filing Lawyers
Income Tax Lawyers in Karachi, Islamabad & Lahore, Pakistan

Income Tax Return Filing

Best Lawyers For Income Tax Return Filing in Karachi, Lahore & Islamabad, Pakistan

Income Tax Return Filing expert tax lawyers of “Pakistan Tax Lawyers Forum” are the most experienced lawyers for income tax return filing in Karachi, Islamabad/Rawalpindi, Lahore and other cities of Pakistan. The fiscal year in Pakistan starts on 1st July and ends on 30th June. Income Taxpayers of Pakistan are required to file their Income Tax returns up to 30th September every year. However, FBR has the authority to extend the last date for Tax Return Filing.

What is Income Tax Return Filing?

FBR requires that all taxpayers file their income tax returns electronically

Generally, income tax is the tax that is imposed on your income. All income earners, including self-employed individuals, salaried employees, and unincorporated firms, pay it. The government receives a large portion of its revenue from it. Income tax return is an accounting statement of annual income, expenses and assets and the income tax due on the annual income.

An income tax return is a form that is submitted to the government by individuals or businesses in order to claim any money they have paid in taxes.

The most important thing to know about income tax returns is how they are filed. The process can seem complicated at first, but once you understand the basics, you’ll find it’s actually quite simple.

In Pakistan, FBR requires that all taxpayers file their income tax returns electronically through their IRIS website. However, it is possible to get an extension on your filing deadline if you need more time after 30th September.

Our expert income tax lawyers and consultants are here to help and guide you through this process so that your taxes are filed correctly!

Income Tax

Those who have taxable income for every tax year are subject to the rates established by the government under section 4 of the Income Tax Ordinance 2001.

What is Tax Year?

A tax year starts on 1st July and ends on 30th June, and is calculated by taking the date from the end of the calendar year that the said date occurs.

What is Taxable Income in Pakistan?

A person’s taxable income is calculated as the total income of the person within the tax year after subtracting all allowances to deduct, such as Zakat, etc.

What is the income limit for income tax Purpose?

A business person’s total income is the sum of his or her annual income from all sources i.e rent from property, profits on investments, profit on the sale of movable or immovable properties, income from prize bond winning and any other sources. All business expenses should be subtracted from the gross income because the income tax should be applied on total Net Income. For business personnel, the taxable limit is above Rs.400,000.

What is the minimum salary to pay income tax in Pakistan?

A salaried person’s total income is considered the sum of his or her annual income from salary including income from all other sources such as Rent from the property, profits on investments and profits from any other source. For salaried personnel, the taxable limit is above Rs.600,000.

Contact Us For Income Tax

Income Heads as per Income Tax Ordinance 2001, in Pakistan

In accordance with the Tax Ordinance 2001, income is classified into different categories, such as income from property, salary, income from a business, income from investments and income from capital gains.

A country’s tax structure determines its economic strength. As per the law, Pakistani citizens are responsible for declaring assets, documenting annual tax returns, and paying due taxes on time. A few months ago, the government announced new tax reforms to simplify and modernize the taxation system in Pakistan, encouraging individuals to file tax returns and pay the due taxes. There is a widespread misconception that tax paying is optional. Although, tax evasion is a criminal offense, which may result in the tax evader being punished. Income Tax Ordinance 2001 defines the tax regulations in Pakistan. Taxation in the country is regulated by the Federal Board of Revenue (FBR). NTN registration is required to file tax returns. For 2019-2020, the following tax rates and tax slabs are in effect for salaried and non-salaried persons according to the Federal Budget of Pakistan:

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INCOME TAX SLABS FOR SALARIED PERSONS​

Unless the individual’s taxable income is less than 75% of their income under the ‘Salary’ head, the following tax rates apply:

Income Tax Slabs/Rates For Salaried

  • 0% income tax rate if taxable income is below Rs. 600,000.
  • If the taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000, the tax rate is 5% on the amount above Rs. 600,000.
  • For taxable income over Rs. 1,200,000 but below Rs. 1,800,000, the tax rate is Rs. 30,000 plus 10% over Rs. 1,200,000.
  • When taxable income exceeds Rs. 1,800,000 but falls below Rs. 2,500,000, income tax rate is Rs. 90,000 plus 15% of the amount over Rs. 1,800,000.
  • In the case of taxable income exceeding Rs. 2,500,000 but below Rs. 3,500,000, the income tax rate equals Rs. 195,000 plus 17.5% on the amount above Rs. 2,500,000.
  • A taxable income of more than Rs. 3,500,000 but less than Rs. 5,000,000 is taxed at an income tax rate of Rs. 370,000 plus 20% on the amount above Rs. 3,500,000.
  • If you have taxable income exceeding Rs. 5,000,000 but less than Rs. 8,000,000, your income tax rate will be Rs. 670,000 plus 22.5% of the amount above Rs. 5,000,000.
  • If taxable income exceeds Rs. 8,000,000 but does not exceed Rs. 12,000,000 – Income tax rate = Rs. 1,345,000 plus 25% on the amount over Rs. 8,000,000.
  • When taxable income exceeds Rs. 12,000,000 but is below Rs. 30,000,000, the income tax rate is Rs. 2,345,000 plus 27.5% for the amount over Rs. 12,000,000.
  • In the case of taxable income over Rs. 30,000,000, but under Rs.50,000,000, income tax rate would be Rs. 7,295,000 plus 30% of the amount over Rs. 30,000,000.
  • In case of taxable income exceeding Rs. 50,000,000 but below Rs. 75,000,000, the tax rate is Rs.13,295,000 plus 32.5% on the amount above Rs. 50,000,000.
  • A taxable income exceeding Rs.75,000,000 is taxed at Rs.21,420,000 plus 35% of the amount above that.

Income Tax Slabs/Rates For Business

Individuals whose income is under the ‘Salary’ head exceeds 75% of their taxable income will be subject to the following tax rates:

Taxable Income Rate of Tax:

  1. Under Rs. 400,000 taxable income, the income tax rate is 0%.
  2. In the case of taxable income above Rs. 400,000 but below Rs. 600,000, the tax rate is 5%.
  3. If your taxable income exceeds Rs. 600,000 but is under Rs. 1,200,000, your income tax rate is Rs. 10,000 plus 10% on the amount above Rs. 600,000.
  4. In the case of taxable income exceeding Rs. 1,200,000 but less than Rs. 2,400,000, the income tax rate is Rs. 71,000 plus 15% on the amounts above Rs. 1,200,000.
  5. A taxable income that surpasses Rs. 2,400,000, but falls below Rs. 3,000,000 is taxed at a rate of Rs. 250,000 plus 20% of the above-mentioned amount.
  6. Over Rs. 3,000,000 but under Rs. 4,000,000, the income tax rate is Rs. 370,000 plus 25%.
  7. Unless the taxable income exceeds Rs. 6,000,000 but does not exceed Rs. 8,000,000, the income tax rate will be Rs. 620,000 plus 30% for the amount above Rs. 4,000,000.
  8. If income exceeds Rs. 6,000,000 – tax rate: Rs. 1,220,000 plus 35% on the amount above Rs. 6,000,000.

Short FAQ

Filer and Non-Filer: A Filer files tax returns, whereas a Non-Filer doesn’t.
Tax Filer: One who files income tax returns, he is called a Tax Filer.
Benefits of Tax Filers: Tax Filer has to pay half withholding tax.
Non Filer in Pakistan: One who doesn’t file income tax returns.
Why should I become a Filer? To become a responsible citizen.
Income tax filer: A responsible citizen who pays income tax regularly.
Who is a Non-Filer? An irresponsible citizen who doesn’t pay income tax.

Getting Income Tax Returns Filed

Due to Pakistan’s strict government programs regulations, it has become imperative to be completely compliant with the country’s taxation system. Pak.tax, a business network of professionals in Karachi and Islamabad, offers expert tax advice and tax lawyer services. 

Furthermore, we assist you in tax deductions and insurance conditions that are in your favor. Consequently, you can focus on your core business. There are tax lawyers and tax advisers in Karachi and Islamabad who provide tax consultancy services in the following areas:

  • Individualities.
  • Salaried Earner.
  • Associations.
  • Companies.
  • Non-Profit Organization (NGOs).

Our process involves making a complete analysis of your accounts books, creating an Income Statement, making essential amendments (if necessary), and finishing the Income Statement. After the process is completed, the Return of Income is demonstrated to the customer after discussion and approval.

Services of Our Income Tax Lawyers in Karachi, Islamabad & Lahore, Pakistan

For your compliance with the tax regulations, we offer you the following high-quality tax consultancy services:

  • Tax planning and strategy development.
  • Documenting your Tax returns.
  • National Tax Number (NTN) enrollment for tax correspondence with FBR.
  • Taking interpretations and documentation from the FBR regarding taxation authorities.
  • Wealth statement Preparation.
  • Electronic Challan Payment and Preparation.
  • Filing and Preparation of other tax statements (if needed).
  • Give guidance in FBR audit and Conduct tax audit.
  • Guidance and Advisory on day-to-day tax issues of the clients.
  • Manage appeals and objections.
  • Guidance on Tax Deduction.
  • Refunds of Income-tax from the tax authorities for clients.
  • Manage Tax exemptions for educational institutions and NGOs.