Abcsalary Brocheure

2456 Words10 Pages
Tax on Salary 2012 Income Tax Law & Calculation “This tax guide is for the use of CLIENTS and STAFF only and covers the taxability aspects of the salary as per Pakistani income tax laws applicable to Tax Year 2012” A. Salam Jan & Co. - Chartered Accountants – is a member of AFFILICA International – a network of independent accountancy firms. ASC – GUIDE ON SALARY TAX – TY 2012 1 INTRODUCTION This tax guide gives information for arriving at the taxable income of a salaried person and computation of tax liability thereof under the Income Tax Ordinance, 2001. It is equally informative and useful from the employers’ perspective not only to determine the amount of tax to be withheld every month from the salary paid to…show more content…
Where the taxable income exceeds Rs. 4,550,000. Rate of Tax 0% 1.5% 2.5% 3.5% 4.5% 6.0% 7.5% 9.0% 10.0% 11.0% 12.5% 14.0% 15.0% 16.0% 17.5% 18.5% 20.0% MARGINAL RELIEF Through Finance Act 2008 the provision for marginal relief in the tax rates was introduced to remove anomaly in the tax rates. The marginal relief is available on amount in excess of maximum limit of the preceding slab relative to slab in which the taxable income fall. The marginal amount will be taxed at the following rates: S.No 1 2 3 4 5 If taxable income of the tax payer is Up to Rs.550,000 550,001 to 1,050,000 1,050,001 to 2,250,000 2,250,001 to 4,550,000 4,550,001 and above Percentage of incremental income taxable at next applicable tax rate 20% 30% 40% 50% 60% Tax on Salary © 2011 A. Salam Jan & Co. Chartered Accountants – member of AFFILICA International. www.asalamjan.com ASC – GUIDE ON SALARY TAX – TY 2012 3 Special Notes: 1. For withholding tax purposes these rates shall apply to salary paid on or after first day of July 2011. 2. When the relief worked out through marginal relief provision ceases to exist then it would not be applicable and tax shall be computed normally without marginal relief. As a result one has to work out the salary tax calculation with and without marginal relief and lower of both workings will be the final tax on salary. Following examples will further explain the concept. Example-I: If a taxable salary income, of a person

    More about Abcsalary Brocheure

      Open Document