Tax credits Flashcards
Profit on debt
Lower of
- Actual amount paid during the year
- 50% of taxable income
- Rs 2000,000
Educational Expenses
Available to every individual who paid tuition fee of children whose taxable income is less than 1.5 M Rs
Lower of
- 5% of tuition fee paid during the year
- 25% of taxable income
- Rs 60,000 multiplied by no.of children
Foreign tax credit
Applicable?
All person who are resident and earn foreign source income on which tax has already been paid
On which situation foreign spurce of income is not taxable in Pakistan?
If there is tax treaty between Pakistan and other country
Income of short term resident
Income of returning expatriate
Foreign source salary
Foreign tax credit
Lower of
-foreign income tax paid
-Pakistan tax payable by formula
Tax liability / Taxable income * FS I
Charitable donations
Tax payable over taxable income * Eligible amounto
Eligible amount is Lower of
-actual amount of donation/FMV of property given
-30% of taxable income (individual)
20% (in case of company)
Investment in share or life insurance premium
Any of one is allowed at one time
Share must hold atleast 24 minths
Eligible amount
Lower of
- actual amount of investment/premium
- 20% of taxable income
- Rs 1.5M
Premium payment on health insurance
Eligible amount
Lower of
- total premium paid
- Rs 1.5M
- 5% of taxable income
Approved pension fund
Eligible amount
Age less than 41 years
Lower than
- actual amount paid
- 20% of taxable income
Age 41 or more
Lower of
- actual amount paid
- 20%+2% each complete year after 40 years
- 30% taxable income of proceeding year
Senior Citizenship allowance
Reduction tax liability of 50%
Whose taxable income does not exceed Rs 1M
Full time teacher allowance
40% tax payable on his income from salary
