Today we were going to guide you on How To Calculate Income Tax On Salary In Pakistan – For learning, you need to read carefully this post and follow the steps.
Income tax on salary can seem like an intimidating concept if you’ve never had to deal with it before, especially because of the numerous other taxes you may have to pay as well, such as value-added tax (VAT) and corporate income tax, not to mention any other fees or bonuses that you might get during the year. But it’s not as complicated as it seems at first glance! You can calculate income tax on salary in Pakistan using this guide.
Brief Introduction
Anyone who has an income from a source within Pakistan is liable for income tax. This means all natural persons (individuals) with income, as well as companies, associations, institutions and authorities.
The amount of income tax you have to pay depends on various factors such as how much you earn and where your source of income is located.
You can use Income Tax Calculator 2022-23 for calculating Income Tax on salary in Pakistan. If you are looking for a detailed Guide or steps then check out below
What Is Income Tax?
Income tax is a monetary sum that an individual or company must pay as a part of their income. It is usually applied through a negative, progressive income tax on a salary structure.
Income tax is divided into 5 main categories:
- Federal Income Tax
- State Income Tax
- Local Income Tax
- Social Security and Medicare Taxes
- Self-Employment (SE) taxes
Who Are Liable To Pay Income Tax?
Income tax is imposed upon every person who is resident in Pakistan and who, for any reason whatsoever, receives or becomes entitled to receive during a year any income, profits or gains from any source inside or outside Pakistan. Income received by an individual for his own use is not taxable except when it accrues under one of the following three heads:
- Income Derived From Capital
- Business Income
- Income From Other Sources
Types Of Income-Tax (Taxable & Exempted)
There are 2 types of income tax available in Pakistan, i.e., Taxable Income and Exempted Income. Let us look at each one of them.
How To Calculate Your Income Tax?
To calculate your income tax, you need a few important bits of information: how much money you made last year, whether or not you’re eligible for any special deductions and how many dependents you have. Be sure to gather all these bits of information before doing your taxes so that there are no hiccups later on.
Obtaining Return From IT Dept.
IT departments in businesses should be well aware of tax filing requirements and will generally calculate a taxpayer’s taxable income for him or her, taking into account all allowable deductions.
If you are self-employed, however, it’s up to you to work out your taxable income—and that means taking into account all your income sources, such as cash salary, bonuses and allowances; investment income; property rental income; and any other gains from the capital.
Check: How To Open An EasyPaisa Account?
Credits Available Under Section 87 & 89 (1)(a) Of The Act,1961
A deduction of Rs.40,000/- (Rupees forty thousand only) has been allowed from profits and gains of business or profession under Section 87.
This is a deduction at the source which may be claimed by an individual assessee or his duly authorized agent having an interest in such business or profession.
Tax Slabs For FY2022-23
[table id=179 /]