Advance Taxation (How Tax Firms Operate)

ADVANCE TAXATION
REPORT
Rameen Khalid and Ahmed Ijaz
What are the Steps for Income file tax?
1) Open the Portal (IRIS)

2) Open Form
3) Fill all the formality – creating the account
Adding amounts Heads wise
For example, Rental income will be written in the rent section
Fill all Individual heads
4) Now you will go to “Tax chargeable” – here you should know which credits to avail
5) Create you Wealth statement – personal expense, assets and liabilities
6) Reconciliation to check for errors
7) Pay Challan
8) File the Return
Can we file Salary income jointly?

No, you cannot file jointly. It’s allowed in the US (not in Pakistan)
What are some Major deductions for salaried persons?

1) Welfare credits
2) Zakat
3) Loan
4) Profit on debts
You have to make sure which credits to pick and what are their relative treatments.
How to claim deductions for Provident funds and pension funds?

We go to the Tax chargeable payment section. You will be given several adds and losses but
what you want to credit should be known by you section wise
(Sections 151, 148, 236)
Then we Apply the credits.
(Sometimes you have to add the value yourself)
How to fix Errors after its being filed?
1) Revise return
2) Fill form
3) Confirmation approval by commission
4) We tell them the problem we want to fix
5) If they are Satisfied, they will approve your request
(Wealth statement can be revised without commission’s approval)
What is the Penalty for late filing of tax?

For a Salaried person- an active tax payer has to pay a 1000 Rs challan.
Can you provide guidance on how to properly report foreign income and assets for tax
purposes in Pakistan?
1) Your tax return needs to include information on all income you get from sources outside of
Pakistan, such as salaries, dividends, and rental income. It is necessary to convert this income to
Pakistani Rupees.
2) List all international assets—bank accounts, real estate, investments, etc.—that are held
outside of Pakistan. Give specifics about the assets, such as their nature, location, and value.
3) If you have previously paid taxes on overseas income in another nation, you can be qualified
for a tax credit.
4) In order to record overseas income and assets, you might also need to file supplementary
forms with your tax return.
What are the requirements and procedures for obtaining tax residency status in Pakistan, and
how does it impact an individual's tax liabilities?
The tax residency status of an individual in Pakistan is established by their actual presence
within the nation.
Residency Requirements: During a tax year, a person is deemed to be a tax resident in Pakistan if
they fulfill any of the following requirements:
They spend at least 183 days in Pakistan.
They spent at least 120 days in Pakistan during the tax year and at least 365 days in the four
years prior.
Individuals can apply for a National Tax Number (NTN) and submit yearly income tax returns to
formally establish their tax residency in Pakistan.
What is transfer pricing issues for multinational corporations operating in the country?
Through the Transfer Pricing Regulations, which are upheld by the FBR, the tax system handles
transfer pricing concerns for foreign companies doing business in the nation. Transfer pricing is
the process of pricing transactions between related parties, such subsidiaries of a multinational
company, with the goal of preventing tax evasion by ensuring that these transactions are carried
out at arm's length rates.
What sort of information you required from a client to file his/her tax return?
* Receipts for expenses paid

* Annual bank statement
* Additionally, formal records if any property is bought or sold.
* The state of any business's accounts, if any, and any income receipts
With all of this data, we next use to generate trade accounts, capital accounts, income statements,
balance statements, and other wealth statements. Finally, we file the returns after consulting with
the customer.
You don't need bank statements for sales tax.
* Sales invoices
* Input purchases (the total amount of purchases made)
* Inventory stocks (the amount of inventory available and the amount to be consumed)
* The amount of tax paid on inventory
Are there any tax benefits available for small business? If any can you, can you give an
example?
Pakistani small enterprises do not receive any tax perks. Since cottage industry is the best
illustration of tiny enterprise, that is what I will discuss. Though the Ordinance states that cottage
industries will receive tax benefits, Pakistan does not see any such benefits. I'll explain what the
Sales Tax Ordinance actually states. The Sales Tax Ordinance contains a provision stating that
the cottage industry is exempt from paying any taxes and that it is eligible for numerous income
tax credits. And it's not easy for someone in Pakistan to claim those credits because they have to
overcome many obstacles. So they leave it in order to escape those obstacles.

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ADVANCE TAXATION

What are the Steps for Income file tax?

1) Open the Portal (IRIS)

Can we file Salary income jointly?

What are some Major deductions for salaried persons?

How to claim deductions for Provident funds and pension funds?

(Wealth statement can be revised without commission’s approval)

What is the Penalty for late filing of tax?

* Receipts for expenses paid

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