CHAPTER 1 (TAX YEAR AND RESIDENTIAL STATUS) complete

Question 1

2- Write provisions of change in tax year?

Answer 1

*A person using normal or special tax year may apply to the commissioner to change to special or normal tax year respectively.
*The commissioner shall grant permission subject to the conditions if the person shows a compelling need for the change
*In case The commissioner wants to reject application, an opportunity of being heard is provided
*The person may file application to FBR and its decision shall be final

Question 2

1- What is tax year? Explain normal, special and transitional tax year?

Answer 2

WRITE

Question 3

3- Write residential criteria for an individual?

Answer 3

An individual shall be a resident individual provided any of following:
*is present in Pakistan for period or periods aggregating to 183 or more days
*is an employee of federal or provincial govt posted abroad
*ia a citizen of Pakistan not the resident tax payer of any other country or not present in any country for more than 183 days

Question 4

4- Write procedure for counting of days for income tax purpose?
Also exception?

Answer 4

Part of the day an individual is present in Pakistan counts as a whole day including:
-a day of arrival in Pakistan
-a day of departure from Pakistan
-a public holiday
-a day of leave
-a holiday spent in Pakistan before or after an activity in Pakistan
-a day during which individual activity is interrupted due to any reason
EXCEPTION:
A day or part of a day an individual is in Pakistan solely due to being in transit between two countries outside Pakistan does not count as a day present in Pakistan

Question 5

5- Residential status of an AOP and COMPANY?

Answer 5

-An AOP shall be a resident aop if its control and management is partly or wholly situated in Pakistan during year
-A company who is incorporated in Pakistan or whose control and management is wholly situated in Pakistan during the year

Question 6

6- Explain the term person?

Answer 6

• An individual
• A company or AOP
• The federal govt or a foreign govt or a political sub-division or a public international organization

Question 7

6- Explain the term company?

Answer 7

Page no 3

Question 8

7- Under what circumstances the foreign source income of a resident is exempt?

Answer 8

1-TAX TREATY
In case of contradiction b/w local laws and tax treaty, local laws have no effect
2-FOREIGN SOURCE INCOME OF A RETURNING EXPATRIATE
A person who:
-Is a resident of current year
-not a resident for last 4 preceeding tax years
-foreign source income exempt in current and following tax years

3- FOREIGN SOURCE INCOME OF SHORT TERM RESIDENT
-present in Pakistan due to reason of employment for not exceeding 3 years
-foreign source income not brought or received into Pakistan shall be exempt

4- FOREIGN SOURCE SALARY OF RESIDENT INDIVIDUAL
Foreign source salary shall be exempt:
-if person leaves during a year and remains abroad during that tax year
-if resident person has paid income tax on foreign source salary or his employer had deducted and had paid to revenue authority of that country