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10% of salary (basic + dearness allowance) or 10% of gross income (self-employed) can be claimed as maximum deduction subject to an upper ceiling of Rs.1.5 lakhs. The additional deduction of up to Rs.50,000 is available for contributions by individuals towards NPS under sub-section 1B, taking the total deductions to Rs.2 lakhs per year.


Pakistan source Income. Is defined in section 101 of the Income Tax Ordinance, 2001, which caters for Incomes under different heads and situations. Some of the common Pakistan source Incomes are as under: -. Salary received or receivable from any employment exercised in Pakistan wherever paid; Salary paid by, or on behalf of, the Federal ...


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Income Tax Act

salary or wages, except in sections 5 and 63 and the definition death benefit in this subsection, means the income of a taxpayer from an office or employment as computed under Subdivision A of Division B of Part I and includes all fees received for services not rendered in the course of the taxpayer's business but does not include ...


INCOME FROM SALARIES. Any remuneration paid by an employer to his employee in consideration of his service is called Salary. It includes monetary value of those benefits and facilities provided by the employer which are taxable. Section 15, 16 and 17 of the Income tax act, 1961 deal with the computation of income under …


Income Tax is calculated based on the total take-home amount and not just basic. As it is a component of total salary, it is taxable. This is the reason companies don't put basic higher than 40%-50% of CTC.


Income from Salary 1. Income Tax Income from Salary -: Complied By :- Prof. Rajesh Jain [email protected] 2. Heads of Income :Chargeability Income Head Chapter under Income Tax Act Sections Charging Section Income from Salary IV-A 15-17 15 Income from House Property IV-C 22-27 22 Profit & Gains from Business & Profession IV-D 28-44D 28 Capital Gain IV-E 45-55A 45 & 46(2) Income …


income: The return in money from one's business, labor, or capital invested; gains, profits, salary, wages, etc. The gain derived from capital, from labor or effort, or both combined, including profit or gain through sale or conversion of capital. Income is not a gain accruing to capital or a growth in the value of the investment, but is a ...


The Income Tax Ordinance, 2001 Section . 12. Salary.- (1) Any salary received by an employee in a tax year, other than salary that is exempt from tax under this Ordinance, shall be chargeable to tax in that year under the head "Salary". (2) Salary means any amount received by an employee from any employment, whether of a revenue or capital nature, including –


Who is Liable to Pay Income Tax – Meaning & Types of Assessee [Section 2 (7)] It means a person covered by any one of the following categories –. 1. Regular/Normal Assessee. A person by whom any tax or any other sum of money (e.g. penalty/ interest) is payable under Income Tax.


1. What Does "Salary" Include. Section 17(1) of the Income tax Act gives an inclusive and not exhaustive definition of "Salaries" including therein (i) Wages (ii) Annuity or pension (iii) Gratuity (iv) Fees, Commission, perquisites or profits in lieu of salary (v) Advance of Salary …


any arrears of salary paid or allowed to him in the previous year by or on behalf of an employer or a former employer, if not charged to income- tax for any earlier previous year. 3Explanation 4 1].- For the removal of doubts, it is hereby declared that where any salary paid in advance in included in the total income of any person for any previous year, it shall not be included again in the ...


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Income tax - Wikipedia

An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income).Income tax generally is computed as the product of a tax rate times the taxable income. Taxation rates may vary by type or characteristics of the taxpayer and the type of income.


B.—Deduction at source. Salary. 4 192. 5 (1) Any person responsible for paying any income chargeable under the head "Salaries" shall, at the time of payment, deduct income-tax 6 [***] on the amount payable at the average rate of income-tax 7 [***] computed on the basis of the 8 [rates in force] for the financial year in which the payment is made, on the estimated income of the assessee under ...


income tax. n. a tax on an individual's net income, after deductions for various expenses and payments such as charitable gifts, calculated on a formula which takes into consideration whether it is paid jointly by a married couple, the number of dependents of the taxpayers, special breaks for ages over 65, disabilities, and other factors.


Under section 89, read with Rule 21A (2), an employee can claim relief in respect of arrears of salary. Relief can be computed in the following manner: Calculate total tax liability on the total income, including the additional salary (Advance Salary or Arrears of Salary) of the year in which such salary is received.


The term salary is defined under section 17 (1) of the income tax act to include following items as salary; Wages. Any annuity or pension. Any gratuity. Any fee, commission, perquisite or profit in lieu of salary or in addition to any salary or wages. Any advance of salary. Any payment received by an employee in respect of any period of leave ...


Remuneration paid to Partners under Section 40(b). Payment of Salary, Bonus, Commission or Remuneration, by whatever name called is allowed only to a Working Partner. If it is paid to be a non-working partner, the same shall be disallowed.


Income Tax is a tax on a person's income, emoluments, profits arising from property, practice of profession, conduct of trade or business or on the pertinent items of gross income specified in the Tax Code of 1997 (Tax Code), as amended, less the deductions if any, authorized for such types of income, by the Tax Code, as amended, or other ...


Deductions from Gross Salary. To calculate Income Tax, gross salary minus the eligible deductions are considered. For instance: you will have to subtract HRA exemption, any home loan EMI, investments under section 80C and 80D and similar such things for calculation of taxable income.


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Notes on income tax laws

Notes on income tax laws Tax Year 2012 Muhammad Ovais, Deloitte – 13th MFC 3 Company: if it is incorporated under any law in force in Pakistan, the control and management of affairs of the company is situated wholly in Pakistan at any time in a year or it is a Provincial or Local


S corporation return. An S corporation must file a return on Form 1120S, U.S. Income Tax Return for an S Corporation. This shows the results of the corporation's operations for its tax year and the items of income, losses, deductions, or credits that affect the shareholders' individual income tax …


a) TAX on total income of that year INCLUDING additional Salary b) TAX on total income of that year EXCLUDING additional Salary (B) Step 3 : [A-B] Positive Negative Relief YES NO 62. 2009-2010 • Up to 150,000 nil • 150,000 -300,000 10% • 300,000-500,000 20% • 5,00,000 & above 30% E.g. Salary of Raju for P/Y 2008-09 was ₹20,000 per month.


Tax liabilities are the entire amount of tax outstanding within a concerned time horizon, payable to taxing entities like central or state government or local authorities like a municipality. Individuals and institutions are liable to pay taxes on their earned income. In business, these are considered as short-term debt accounted for on the balance sheet and cleared off within the given year.


Definitions. 2. In this Act, unless the context otherwise requires,— ... "gross profits" means the gross profits calculated under section 4 ; (19) "Income-tax Act" means the Income-tax Act, 1961 (43 of 1961); (20) "prescribed" means prescribed by rules made under this Act; (21) "salary or wage" means all remuneration (other ...


20 March 2008 The definition of income under the Income Tax Act is of an inclusive nature. ie apart from the items listed in the definition, any receipt which satisfies the basic condition of being income is also to be treated as income and charged to income tax accordingly. Income includes:-*Profits or Gains from business or profession including any benefit, amenity, perquisite obtained in ...


1. Computation of " Salary " Income [Section 15-17] Salary income of an employee is to be computed in accordance with the provisions laid down in sections 15, 16 and 17. Section 15, as discussed earlier gives the scope of this head and tells us that which incomes shall form part of this head.Section 16 gives deductions to be allowed out of incomes taxable under this head.


Deductions under the head salaries as provided under Section 16 of the Income Tax Act,1961 Professional Tax which is levied by State Government Entertainment Allowance: This allowance is available to all government employees to the extent of Rs.5000 or 20% of his salary or the actual amount received whichever is less.


The above definition of word 'salary' U/s 17(1) includes the above mentioned items. These can be explained in following manner : Wages—any amount received by a person for work done or job rendered is called wages. It may be received under the name of 'Pay', 'Basic Pay', 'Salary', 'Basic salary…


Disclosure Of Exempted Income For Salary Allowances . Those individuals or taxpayers who receive income in the form of salaries are permitted specific allowances that are non taxable. Disclosure of this type of exempted income is required to be made under ''Schedule S - Details of Income from Salary'' when filing tax returns under ITR-2.


Direct sellers and licensed real estate agents fall under the self-employed or independent contractor classification for federal income tax purposes if most or all income derives from sales and not the number of hours worked, and the seller or agent performs her duties under a contract indicating she not be treated as an employee.


'Income' in this Act connotes a periodical monetary return 'coming in' with some sort of regularity, or expected regularity, from definite sources. As per Income Tax Act, 1961- "Income" includes: 1) profits and gains 2) dividend 3) value of any perquisite or profit in lieu of salary taxable under clauses (2) and (3) of section 17 4) voluntary contributions received by a trust created wholly or ...