ISLAMABAD COLLEGE FOR BOYS, G-6/3, ISALAMABAD

Income Tax
(Numerical)

[Tax Year 2015]

For B. Com. Students
Muhammad Aqeel
Lecturer in Commerce
Islamabad College for Boys, G-6/3
Islamabad

Islamabad College for Boys, G-6/3, Islamabad

Tax Year 2015

Calculation of Tax Liability (Suggested Pattern)

Name of Taxpayer
:
Mr. ABC
National Tax Number
:
xxxxxxx-x
Tax Year Ended
:
30th June, 2015
Tax Year
:
2015
Personal Status
:
Individual Salaried
Residential Status
:
Resident
Requirement: Computation of Total Tax Liability.

Details

Rs.

Income from Salary

[Sec. 12]

XXX

Income from Property

[Sec. 15]

XXX

Income from Business

[Sec. 18]

XXX

Capital Gains

[Sec. 37]

XXX

Income from Other Sources

[Sec. 39]

XXX

Total Income

XXX

Less:
1. Zakat paid under Zakat and Ushr Ordinance, 1980
2. Payment to Workers Welfare Fund / Workers
Participation Fund
3. Donations to Approved Institutions

XXX
XXX
XXX

nd

(XXX)
XXX

(Clause 61 of Part I of 2 Schedule)

Less: Loss from any source

(XXX)

(Excluding loss from speculation business and Capital Loss)

Actual Taxable Income

XXX

Add: Share from AOP (and incomes included for rate purposes)

XXX

Taxable Income for rate purposes

XXX

Computation of Tax Liability

Tax on Taxable Income as per First Schedule Rates
Less: Tax credit on rate purpose incomes
(Amount of Tax Taxable Income for rate purposes) (Rate Purpose Income)

Tax on Actual Taxable Income

Less: Reduction in case of Researchers and Teachers @ 40%

XXX
(XXX)
XXX

(Tax on Actual TAI Actual TAI Income from Salary 40%)

(XXX)

Less: Reduction in case of Senior Citizen (STR) @ 50%

XXX
(XXX)

Gross Tax

XXX

Less: Foreign Tax Credit

[(Gross Tax Actual TAI) (Foreign Income)
OR
(Foreign Income Tax Paid) Whichever is less]
Muhammad Aqeel, Lecturer in Commerce

XXX

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Islamabad College for Boys, G-6/3, Islamabad

Tax Year 2015

Tax after Foreign Tax Credit

XXX

Less: Average Relief (See details on Page No. 8)

Donations to Approved Institutions
(Other than given in 2nd Schedule)

XXX

Investment in Shares

XXX

Insurance Premium paid on life insurance

XXX

Contribution towards approved Pension Fund

XXX

Profit on debt in respect of loan for house

XXX

Total Amount Admissible for Relief

XXX

Average Relief

(XXX)

Avg. Relief = (Tax after foreign tax credit Actual TAI) (Admissible Amount)

Tax Liability under Normal Tax Regime (NTR)

XXX

Add: Tax on Golden Handshake (@ avg. rate of 2 or 3 preceding years)

XXX

Total Tax Liability

XXX

Less: Tax Deducted at Source (Other than non-adjustable tax)

(XXX)

Net Tax Payable with Return

XXX

Tax Paid under Final Tax Regime (FTR):

FTR Tax 1

XXX

FTR Tax 2

XXX

Muhammad Aqeel, Lecturer in Commerce

XXX

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Islamabad College for Boys, G-6/3, Islamabad

Tax Year 2015

Tax Rates for Salaried Taxpayers

Muhammad Aqeel, Lecturer in Commerce

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Islamabad College for Boys, G-6/3, Islamabad

Tax Year 2015

Fully Taxable Income from Salary

S. #

Head of Income

Amount

1.

Efficiency Honorarium

XXXX

2.

Qualification pay

XXXX

3.

Life Insurance Premium paid by the Employer

XXXX

4.

Salary of Mali and Chaukidar paid by the employer

Amount waived by the employer from loan received by the
employee
Special Pay

XXXX

XXXX

9.

Special Additional Allowance

Leave encashment ( Taxable for Private employees )/ Pay in Lieu of
Leave/ Encashment of Leaver Preparatory to Retirement (LPR)
Orderly Allowance

10.

Performance Award

XXXX

11.

Club Membership fee paid by the employer

XXXX

12.

Project Allowance

XXXX

13.

Computer Allowance

XXXX

14.

Overtime payment

XXXX

15.

Compensation of Loss by Employer

XXXX

16.

Special Relief allowance

XXXX

17.

Senior Post Allowance

XXXX

18.

Reward on Passing an examination

XXXX

19.

Ph.D. Allowance

XXXX

20.

Principal-ship

XXXX

21.

Lunch facility (if employer is not in hotel business)

XXXX

22.

XXXX

24.

Servant Allowance
Children Education Expenses paid by Employer / Fixed Educational
Allowance for Children
Utilities Allowance

25.

Annual Leave Fair Assistance (LFA)

XXXX

26.

Incentive award

XXXX

27.

Adhoc relief Allowance

XXXX

28.

Salary received in arrears

XXXX

29.

Bonus

XXXX

30.

Free Air Ticket for an Airline employee (Taxable w.e.f. Tax Year 2014)

XXXX

5.
6.
7.
8.

23.

Muhammad Aqeel, Lecturer in Commerce

XXXX
XXXX

XXXX
XXXX

XXXX
XXXX

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Islamabad College for Boys, G-6/3, Islamabad

Tax Year 2015

Fully Exempt Income from Salary

S. #

Head of Income

Amount

1.
2.
3.
4.
5.

Children Education Facility in Employers Institution

Subsidized Lunch Facility to Hotel employees during duty hours
Leave Encashment (in Case of Government Employees)
Fee Paid for Management Course sponsored by employer
Free Education Facility
Leave fair assistance (if the Business is engaged with traveling
business)
Reimbursement of Internet Usage for Office purpose
Any Services provided by Employer from his own Resources
(UTILITIES)
Free Transport facility to Employees family (If the employer is
engaged in Transport Business)
Free Lodging and Boarding Facilities (If the employer is engaged
in Transport Business)
Amount Received from Superannuation Fund
Amount received as Pension
(In case a Person receives more than one Pension, only the
amount of higher Pension will be Exempt)
Any Scholarship received to meet the expenses of Education
Bonus Shares
Special Allowance

XXXX
XXXX
XXXX
XXXX
XXXX

6.
7.
8.
9.
10.
11.
12.
13.
14.
15.

Muhammad Aqeel, Lecturer in Commerce

XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX

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Islamabad College for Boys, G-6/3, Islamabad

Tax Year 2015

Average Relief
Government allows tax concession on some expenditures and investments. Relief in income tax will be
provided if the person makes any of the following payments:
1)
2)
3)
4)

Donations for charitable purposes

Investments in shares and Insurance premium paid on life insurance*
Contribution to Approved Pension Fund
Profit on debt for construction or acquisition of house

[Section 61]
[Section 62]
[Section 63]
[Section 64]

Amount admissible for average relief for an individual can be calculated as follows:
#

Expenses &
Investment

Treatment

Amount
Admissible
for AR

Donation for
Charitable Purpose

Amount donated OR 30% of Taxable Income Whichever is

Less will be admissible for AR

xxxx

Investment in
Shares & Insurance
premium paid on
life insurance policy

Amount Invested/insurance premium OR Rs. 10,00,000/=

OR 20% of Taxable Income Whichever is Less will be
admissible for AR

xxxx

Contribution to APF

Amount Contributed to APF OR 20% of Taxable Income

Whichever is Less will be admissible for AR

xxxx

Profit on Debts
(Markup on
Housing Finance
Scheme)

Amount of Profit on Debt Paid OR Rs. 7,50,000/= OR 50% of

Taxable Income Whichever is Less will be admissible for AR

xxxx

Total Amount Admissible for Average Relief

xxxxx

* Insurance premium paid on life insurance is admissible for Average Relief w.e.f. Tax Year 2012.

Muhammad Aqeel, Lecturer in Commerce

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Islamabad College for Boys, G-6/3, Islamabad

Tax Year 2015

Incomes/Payments Attracting Income Tax at a Different

Rate
There are certain incomes or payments on which separate rates of taxes are applied. On some incomes or payments
taxes are deducted in advance and then these are adjusted at the time of payment of income tax after close of the tax
year. The treatment of such incomes/payments is given below:

S. #

Head of Income

Rate

Non-Adjustable Tax
(Treatment: The tax is shown at the end of the numerical)
Yield Received on Securities / National Deposit Certificate (NDC) / Defense
Saving Certificate (DSC) / Profit Received on Debt / Yield on Govt.
securities [Sec. 151]
1.

The deduction shall not be made in following cases:

1. Profit on debt received where deposit in bank account does not exceed Rs.
150,000. [2nd Sch., Part-IV, Clause (59)(iv)(a)]
2. Profit on debt on monthly Income Scheme if the monthly Installment does
not exceed Rs. 1,000. [2nd Sch., Part-IV, Clause (59)(iv)(b)]

10%

2.

Winnings from Cross Word Puzzle / Prize on Prize Bonds [Sec. 156]

15%

3.
4.

Lottery / Raffle / Winning a quiz / Prize offered by companies for

promotion of sale [Sec. 156]
Dividend Income received from company [Sec. 150]
(If Dividend is received from Power Project Company / Power generation
company Privatized by WAPDA the rate is 7.5%)

20%
10%

Adjustable Tax
5.
6.
7.
8.

Cash Withdrawal from Bank exceeding Rs. 50,000 in a day.

(This is withholding tax and amount of tax deducted will be adjusted at the
end) [Sec. 231A]
On payment of fee to an educational institution where the fee exceeds Rs.
200,000/= per annum (Sec. 236I inserted by Finance Act, 2013)
On sale of Immoveable Property tax on gross amount received
(Amount of tax adjusted at the end) [236C]
Remuneration for Examiner-ship Fee / Paper Setting Fee
(Income added under the head Income from Other Sources, tax deducted
at the end) [Sec. 153 (1)(b) & (3)(b)]
Income from Property: [Withholding Tax under Sec. 155]

0.3%
5%
0.5%
6%

(If the property is rented out to Federal/Provincial Govt., a company, etc., tax at below given rates
will be deducted at source. Hence, amount of the tax so deducted will be subtracted from tax
liability of the person)

9.

Muhammad Aqeel, Lecturer in Commerce

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Islamabad College for Boys, G-6/3, Islamabad

Tax Year 2015

Separate Block of Income

(Treatment: The income shall be mentioned under its respective head but not to be included in taxable
income column.)
Capital Gain on Disposal of Securities: (for Tax Year 2015) [Sec. 37A]
If holding period is less than 12 months
12.5%
10.
If holding period is more than or equal to 12 months but less than 24
10%
months
Where holding period is 24 months or more
0%
11.

Flying Allowance / Submarine Allowance [2nd Sch., Part-III, Clause (1)]

12.

Golden Handshake will be taxed as separate Block of income on Average

Rates for 3 preceding years (GHS is added to SALARY [Section 12] if rate of
preceding years is not given) [Sec. 12(6)]

Income from Property

2.5%
X% + Y% + Z%
3

[Section 15]

Rental Income from Property OR FMR (whichever is higher)

XXX

Add: 1/10th of Un-adjustable Advance

XXX

Add: Token Money / Forfeited Deposit

XXX

Add: Any burden of the owner borne by tenant

XXX

Rent Chargeable to Tax (RCT)

XXX

Less: Deductions Allowed

(XXX)

Net Amount of Rent

XXX

Income from Property has been reverted back to Normal Tax Regime by omission of Sec. 15(6) by Finance Act, 2013.
Exemption limit of Rs. 150,000/= has been abolished by omission of Sec. 15(7) by Finance Act, 2013.

Deductions in Computing Income Chargeable Under the Head Income from Property
(Sec. 15A, inserted by Finance Act, 2013)

In calculating income chargeable to tax under this head following deductions are allowed:
a) Repairs to building equal to 1/5th of the rent chargeable to tax;
b) Premium paid for insurance of the building;
c) Any local rate, tax, cess in respect of that building;
d) Ground rent paid or payable;
e) Any profit paid or payable on money borrowed for construction, renovation, etc. of the property;
f) Share of rent or interest paid to HBFC or a scheduled bank in respect of loan for this property;
g) Interest paid or payable on mortgage of this property;
h) Collection charges upto 6% of RCT;
i) Legal charges to defend any suit connected with the property;
j) Rent not recovered from the tenant (if the rent is recovered afterwards, it will be taxable in the year in
which it is recovered).

Muhammad Aqeel, Lecturer in Commerce

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Islamabad College for Boys, G-6/3, Islamabad

Income from Business

Tax Year 2015

[Section 18]

Some examples of Income from business are as under:

Income from yarn business

Income From business Abroad (e.g., UK, America, Dubai, etc.)
Income from cutting and selling trees.
Income of doctors
Income of lawyers
Income of professional writer.
Incomes from poultry farm.
Income from Fish Catching business.
Royalty on professional books.
Income from rented out agricultural machinery.
Profit on speculation of shares will be included in the total income from business after deducting:
Any loss from speculation of shares.
Any expense on speculation, i.e., commission or brokerage, etc.

Capital Gains

[Section 37]

Profit and gain arising from the disposal of capital assets is taxable under the head Capital Gains. [37(1)]
The term Capital Asset has been defined as follows:

Capital Asset
Capital asset means property of any kind held by a person excluding the following assets:
1. Any stock in trade (other than stocks and shares), consumable stores or raw materials;
Note: The shares, etc., whether held as stock in trade or otherwise shall be treated as capital asset.
2. Any depreciable assets;
3. Any intangible asset on which amortization is allowed u/s 24;
4. Any movable property held for personal use by the person or his family member dependent upon him. However, the
following assets shall be treated as capital assets:
(i)
A painting, sculpture, drawing or other work of art;
(ii)
Jewelry;
(iii)
A rare manuscript, folio or book;
(iv)
A postage stamp or first day cover;
(v)
A coin or medallion; or
(vi)
An antique.
It may be noted that the property may or may not be held for the purpose of business. In other words a person, who
deals in shares, etc., shall compute his income under the head Capital Gains and not as Income from Business.

Examples of Capital Assets

Modaraba Certificates.
Participation Term Certificates
Term Finance Certificates
Musharika Certificates.
Shares of companies.
PTC vouchers issued by Government of Pakistan.
Leasehold rights.
Partners share in AOP.

Rules regarding Taxability of Capital Gains

Note: Where a capital asset is disposed-off after one year of its acquisition then the gain for income tax
purposes shall be taken as 3/4th (i.e., 75%) of the actual gain on disposal. Remaining 25% of the gain shall be
treated as exempt. If there is a capital loss, it will be deducted from the gain.
Muhammad Aqeel, Lecturer in Commerce

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Islamabad College for Boys, G-6/3, Islamabad

S. #

Capital Gain on Sale of:

1.

Shares of Private Company / Jewelry

2.

Modaraba Certificate
Instrument of redeemable capital, i.e.,
i. PTCs
ii. TFCs
iii. Musharika Certificates
iv. Any other security (excluding shares) not
based on interest.
NIT Units
Shares of a Public Company
PTCL Vouchers
Encashment of Defence Saving Certificates
(Dealt under Income from Other Sources)

3.

4.
5.
6.
7.

8.

Immoveable Property [Sec. 37(1A)]

Muhammad Aqeel, Lecturer in Commerce

Tax Year 2015

Taxability
If disposed-off within 12 months Fully Taxable
If disposed-off after 12 months Exempt upto
25% of gain
Taxable under FTR as Securities

Taxable under FTR as Securities

Taxable under FTR as Securities

Taxable under FTR as Securities
Taxable under FTR as Securities
Exempt being capital receipt
10% if held for upto 1 year
5% if held for more than 1 year and upto 2
years
0% if sold after 2 years

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Islamabad College for Boys, G-6/3, Islamabad

Income from Other Sources

Tax Year 2015

[Section 39]

Any income which is chargeable to tax under any of the provisions of the Income Tax Ordinance and is not
included under any other heads of income, shall be taxed under the head Income from Other Sources.
[39(1)]. Some examples are as follows:

Fully Taxable Incomes:

1.
2.
3.
4.
5.

Directors fees
Income of non-professional writers.
Income by sub-letting the house.
Remuneration for literary work.
Rent of furniture and fittings.

Fully Exempt Incomes:

1.

Profit on sale of inherited house

2.

Cash award granted by President of Pakistan

3.

Foreign remittances ( Amount received from abroad )

4.

Insurance Income received on maturity of policy.

5.

Encashment of DSC if cost and sale price is not given.

6.

Agricultural Income

7.

Any Gift (From Mother or Father, etc.)

8.

Income on encashment of Special Dollar Bonds.

Muhammad Aqeel, Lecturer in Commerce

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