Name: ________________

Tax Year: 2018

Tax Year Ended: 30-06-2018
Residential Status: Resident
Computation of tax payable
Income from Salary (Section 12) Rs.
Basic Salary/ basic pay/ substantive pay (Per month * 12)(fully taxable)
Bonus
Commission
Dearness Allowance
Overseas Allowance
Compensatory Allowance/ cost of living allowance
Salary
Accommodation:
1. Accommodation allowance or house rent allowance is fully taxable.
2. Accommodation facility or rent free furnished or rent free unfurnished accommodation.
I. Value of entitled amount of rent
or
II. 45% of MTS or 45% of basic salary whichever is high is fully taxable.
Note:
1. If MTS is not given then basic salary will be taking into consideration.
2. If value of entitled amount is not given then 45% or 30% of MTS or basic salary is fully
taxable.
3. In case of other than big city, Value of entitled amount of rent or 30% of MTS or 30% of
basic salary whichever is high is fully taxable.
Conveyance:
1) Conveyance allowance is fully taxable.
2) If conveyance provided by the employer to employee for personal or private use then 10% cost
of conveyance is fully taxable.
3) If conveyance provided by the employer to employee for both purposes (Personal and
Professional) then 5% cost of conveyance is fully taxable.
4) If conveyance acquired by the employer on lease and provided it to the employee for personal
use then 10% of fair market value is fully taxable.
5) If conveyance acquired by the employer on lease and provided it to the employee for both
purposes (Personal and Professional) then 5% of fair market value is fully taxable.
Note:
1. If purpose of conveyance is not given then it is assumed that it is given for both purposes.
2. No Treatment if the cost price of conveyance is not given.
Medical
i. Medical facility or hospitalization charges or reimbursement of medical expenditure is
completely exempt from tax.
ii. Medical allowance provided by the employer to employee is exempt up to 10% of basic
salary
iii. If employer provides medical allowance and medical facility to the employee in that case
medical allowance is fully taxable.
Special Allowance
Special allowance is given by the employer to employee during office work for the performance of
office duty is Completely Exempt from Tax. Evan though actual expenses is less than the
allowance e.g. uniform allowance, travel allowance and daily allowance.

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Leave Encashment/ Payment in lieu of Leave
1. Fully taxable in case of government/private employee during service.
2. Completely exempt in case of government employee preparatory to retirement.
Pension
1. Pension is completely exempt from Tax.
2. Fully Taxable, if employee works for same employer at any capacity or designation
at any Remuneration.
3. If employee receives more than 1 Pension then Lower of Pension is fully taxable.
4. If age of employee is 60 years or more then both pension will be exempt from tax.
Gratuity/commutation of pension
1. Completely Exempt in case of Government Employee
2. Completely exempt in case of private employee if amount of gratuity approved by
CIR/CIT.
3. Exempt up to Rs.3, 00,000 in case of private employee if amount of gratuity approved
by FBR.
4. If amount of gratuity is not approved then 50%of the amount of gratuity or Rs.75, 000
whichever is less is exempt from tax.
Loan to Employee
1. If the amount of loan is less than Rs.10,00, 000 then nothing will be included in taxable
income of the employee.
2. In case of interest free loan 10% of the amount of loan is fully taxable
3. If the employer provides loan less than @ 10% in that case the difference of interest rates
will be fully taxable.
4. If employer provides loan at 10% interest rate or above 10% interest rate then nothing will
be included in taxable.
Entertainment
1. Entertainment allowance is fully taxable.
2. Free tea, free coffee provided by the employer to employee during office work in business
premises then it is completely exempt from tax.
3. Reimbursement of entertainment bill is completely exempt from tax.
4. Dinner, lunch is fully taxable.
5. Subsidized lunch facility (in case of hotel employee) is completely exempt from tax.
Utilities
1. Utility allowance (gas, water and electricity) given by the employer is fully taxable.
2. Reimbursement of utilities expenditures is fully taxable.
3. Utility facility provided by the employer from his own resources, without bearing extra
burden is completely exempt from tax.
Miscellaneous items:
1. Special relief allowance is fully taxable.
2. Tax paid by epmloyer
3. Adhoc relief allowance is fully taxable.
4. Free coupon for lunch
5. Special pay is fully taxable.
6. Performance reward
7. Fixed children education allowance is fully taxable.
8. Special additional allowance is fully taxable.
9. Gymkhana fee paid by the employer is fully taxable.
10. Efficiency honorarium is fully taxable.
11. Salary of watchman, sweeper, gardener paid by the employer is fully taxable.
12. Salary of personal cook, driver paid by the employer is fully taxable.
13. Overtime pay is fully taxable.

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 14.PHD allowance is fully taxable.
15.Computer allowance is fully taxable.
16.Project allowance is fully taxable.
17.Senior post allowance is fully taxable.
18.Orderly allowance is fully taxable.
19.Compensation on loss of employment.
20.Compensation for temporary disablement
21.Communication allowance
22.Golden shake hand received during the year if employment period is less than one year
then it is fully taxable.
23. Life insurance premium paid by the employer is fully taxable.
24. Accidental insurance premium paid by employer
25. Reward on passing departmental examination is fully taxable.
26. Internet usage bill reimbursed for personal usage fully taxable.
27. Incentive allowance is fully taxable.
28. Free transport facility to employee’s family by the transport company/employer is fully
taxable.
Completely Exempted items:
1. Management course fee paid by employer is completely exempt from tax.
2. Internet usage bill reimbursed for office usage is completely exempt from tax.
3. Amount received from benevolent fund is completely exempt from tax.
4. Amount received from workers participation fund is completely exempt from tax.
5. Children education facility in employer institution is completely exempt from tax.
6. Fuel reimbursed as per company policy
7. Relocation allowance

Provident Fund Government Recognized Un-Recognized

Provident Fund Provident Fund Provident Fund
Employee’s Fully Taxable but will Fully Taxable but will Fully Taxable but will
Contribution not include in taxable not include in taxable not include in taxable
income because it is income because it is income because it is
already include in his already include in his already include in his
basic salary basic salary basic salary
Employer’s Completely Exempt Exempt up-to 10% of Completely Exempt
Contribution from Tax (Basic Salary + from Tax
dearness allowance)
or
Rs.1, 50,000
whichever is less.
Interest Credited Completely Exempt Exempt up-to 16% Completely Exempt
from Tax rate of interest or 1/3 from Tax
of (Basic Salary +
dearness allowance)
whichever is less.
(Required rate/given
rate)
Accumulated Completely Exempt Completely Exempt Taxable up-to
Balance from Tax from Tax employer’s
Contribution and
interest thereon

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Income from Property (Section 15)
Rental Income from Property (Actual rent r fair market rent whichever is high)
Add:1/10th of un-adjustable advance
Add: forfeited deposits or token money
Add: any burden paid by tenant
Note:
In case of property vacated by tenant and new tenant take the property then
(1/10th un adjustable advance = new advance – portion of old advance that has already been
charged to tax )
Rent Chargeable to tax (Taxable as separate block of income)
Income from Business: (Section 18)
1. Income from Business is fully taxable.
2. Income from fish farming is fully taxable.
3. Income from fish catching is fully taxable.
4. Income or Royalty from professional books is fully taxable.
5. Income from stone queries is fully taxable.
6. Income from poultry farming is fully taxable.
7. Income from U.K business is fully taxable.
8. Income from network design (Exempt)
9. Income from speculation business
Less: loss from speculation business
Income from Capital Gain: (Section 37)
Public company:
1. Gain on sale of public limited company shares or Modarba certificates or NIT units or
voucher of Pakistan Telecommunication Corporations and period of holding is 4 years or
more than 4 years than it is completely exempt from tax
2. If period of holding is more than 2 year but less than 4 years than 7.5% will be taxable as
separate block of income.
3. If period of holding is more than 1 year but less than 2 years than 12.5% will be taxable as
separate block of income.,
4. If period of holding is less than 1 year than 15% will be taxable as separate block of
income.
Private company:
1. Fully taxable if disposed off within 12 months.
2. Exempt up to 25% of net capital gain if disposed off after 12 months.
3. Capital Gain xxxx
Less: Exempt upto 25% Capital gain xxxx
Net Capital Gain
Less: Capital loss

Inherited Items:
1. In case of luxurious (painting, sculprit, coins, jewelry etc..) if the holding period is more
than 12 months then it will be exempt up to 25% of gain otherwise fully taxable.
Immoveable Property:
1. If property was acquired on or after 1st July 2016
1. Completely exempt if disposed off after 3years.
2. Where holding period is 2 years or more but less than 3 years then 5% will be taxable as

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 separate block of income
3. Where holding period is 1 year or more but less than 2 years then 7.5% will be taxable as
separate block of income.
4. Where holding period is up to 1 year then 10% will be taxable as separate block of income.
2.If property was acquired before 1st July 2016
1. Where holding period is up to 3 years then 5% will be taxable as separate block of
income.
2. Where holding period is more than 3 years then completely exempt from tax

Income from Other Source: (Section 39)

1. Agriculture income is completely exempt from tax.
2. Gift from mother, sister, brother in law, cousin, relative is completely exempt from tax.
3. Insurance money receive on maturity of insurance policy is completely exempt.
4. Cash award granted by president of Pakistan is completely exempt.
5. Encashment on DSC / is completely exempt from tax.
6. Gain on sale of residential house is completely exempt from tax.
7. Consideration received on vacating property(Only 1/10th will be taxable)
8. Compensation on delay refund is fully taxable.
9. Profit on encashment of defense saving certificates is fully taxable.
10. Paper setting Remuneration is fully taxable
11. Remuneration for examiner ship is fully taxable
12. Income from T.V talked show delivered is fully taxable
13. Income from non-professional writer, poet or Artist is fully taxable.
14. Part time income is fully taxable.
15. Specified value of bonus share received from private Ltd. Company
16. Loan received from other then employer(friend, relatives etc.) in cash is fully taxable
17. Loan received from other then employer (friend, relatives etc.) through banking channel is
exempt from tax.
18. Remuneration for examiner ship / Paper setting Remuneration / Income from T.V talked
show delivered (Net) need to gross up
(Amount of Remuneration * 100/90)
Total Income Rs
Less:- Straight Deduction:-
1. Zakat paid under the Zakat ordinance
2. Payment to workers welfare fund (WFF)
3. Donation paid under clause 61, Schedule-II
(Amount of donation or 30% of taxable income whichever is less) xxxxx
4. Mark up on house Building finance xxxxx
(Amount of markup or 50% of taxable income or Rs.20,00,000 whichever is less)
5. Children education fee/expenses (If taxable income is less than 15,00,000) xxxxx
(5% of the tuition fee or 25% of taxable income or number of children Multiplying by
Rs.60,000 Whichever is less)
Actual Taxable Income
Add: Share from AOP (included for rate purpose only)
Taxable income for rate purpose

Computation of Tax payable on taxable income for rate purpose:-

Fixed Taxed
Tax on Exceeding Amount
Tax payable on taxable income for rate purpose
Computation of Tax payable on actual Taxable Income:-

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 Tax on taxable income for rate purpose
∗ Actual taxable icome
Taxable income for rate purpose
Gross Tax (tax on actual taxable income) xxxxx
xxxxx
Add:- Separate Block of Income:-
1. Tax on Golden Hand Shake Rs. __________@ (Average rate three proceeding years or two
preceding years).
2.Tax on income from property (See rate of tax on property income) xxxxx
3. If period of holding is more than 2 year but less than 4 years than 7.5% will be taxable as
separate block of income.(In case of public Co.)
4. If period of holding is more than 1 year but less than 2 years than 12.5% will be taxable as
separate block of income.,(In case of public Co.) xxxxx
5. If period of holding is less than 1 year than 15% will be taxable as separate block of xxxxx
income. (In case of public Co.)
Immoveable Property:
If property was acquired on or after 1st July 2016
1. Where holding period is 2 years or more but less than 3 years then 5% will be taxable as
separate block of income
2. Where holding period is 1 year or more but less than 2 years then 7.5% will be taxable as
xxxxx
separate block of income.
3. Where holding period is up to 1 year then 10% will be taxable as separate block of income.
If property was acquired before 1st July 2016
1. Where holding period is up to 3 years then 5% will be taxable as separate block of income.

Less:- Special tax rebate (STR) @ 50%:-

Rs
Note:-
xxxxx
(STR is allowed to a taxpayer when he is of 60 years of age or more (called senior citizen)
on the very first day of the tax year and his taxable income is not more than Rs. 10, 00,000).

Concession for Full time Teacher / Researcher:-

Income from salary
Tax on income from salary:
Fixed tax
xxxxx
Tax on exceeding amount
xxxxx
Tax on income from salary*40%
Less:- Tax credit in case of foreign income tax paid
(Computation of tax credit in case of foreign income tax paid)
(1) Foreign tax paid
OR

gorss Tax
(2) taxable icome ∗ Foreign Income

Taxable income= actual taxable income + Separate block of income

Whichever is less from (1) or (2) will be deducted.

Amount allowed for Average relief (Rebate):-

1.Donation for charitable purposes to Govt. institution or approved Charitable institution:
(amount of donation or 30% of taxable income whichever is less is allowed for relief /
rebate)
2. Contribution to approved pension fund:

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 (amount of Contribution to approved pension fund or 20% of taxable income whichever
is less is allowed for relief / rebate)
3. Investment in shares / Life Insurance Premium paid by employee:
(Actual amount of investment / Amount of Premium or 20% of taxable income or
Rs. 15, 00,000 whichever is less is allowed for rebate.)
4. Investment in Health Insurance
(Amount of investment or 5% of taxable income or Rs.1,50,000 whichever is less)

Note:-
In case of Public Companies rebate is allowed only to original allot- tee or if a person
purchase shares from Privatization Commission of Pakistan.
In case of private companies rebate is allowed only if share purchased from Privatization
Commission of Pakistan.
Less: Average relief

Gross Tax
∗ Total amount allowed for rebate
taxable income

Taxable income= actual taxable income + Separate block of income

OR (If AOP is given than)

Tax on taxable income for rate purpose

∗ Total amount allowed for rebate
Taxable income for rate purpose

Total net tax payable

Less:- Tax deducted at source:-
I. From salary (deducted by employer)
II. Tax on remuneration for examiner ship Rs.__________@10%.
III. Tax on paper setting / checking remuneration Rs.__________@10%
IV. TV talk show remuneration Rs.__________@10%.
V. Tax paid on utilities bills.
VI. Tax paid on motor vehicles
VII. Withholding tax paid on Cash with draw from bank 0.3%
Tax payable with return
Income Covered Under FTR:-
1. Profit / Interest received @ 10%
2. Dividend from listed or unlisted company @15%
3. Prize on prize bond / cross word puzzle @15%
4. Winning from a raffle, lottery@ 20%.
5.Commision received other than employer@ 12%
6.Specified value of bonus share received from public Ltd. company @5%

Taxation of property Income for individual and association of persons:

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S. No. Gross amount of rent Rate of Tax
1 up to Rs. 2,00,000 Nil
2 Rs.200,001 to Rs.600,000 5% the amount exceeding Rs.200,000
3 Rs.600,001 to Rs.10,00,000 Rs.20000 + 10% of the amount exceeding Rs.600,000
4 Rs.10,00,001 to RsRs.20,00,000 Rs. 60,000 + 15% of the amount exceeding Rs. 10,00,000
5 More then 20,00,000 Rs. 2,10,000 + 20% of the amount exceeding
Rs20,00,000