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Taxation Managment

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Taxation Management ­ FIN 623
VU
MODULE 3
LESSON 3.6
IMPORTANT DEFINITIONS
Sec. 2(66) "Taxpayer" means any person who derives an amount chargeable to tax under this ordinance;
o Any representative of a person who derives an amount chargeable to tax under this ordinance
o Any person who is required to deduct or collect tax under part V of chapter X and chapter XII
o Any person required to furnish a return of income or pay tax under this ordinance.
Exercises on determination of Tax Year
Exercise 1: Determine Tax year relating to following accounting period:
1st July 2002 to 30th June 2003
A
1st July 2003 to 30th June 2004
B
1st July 2004 to 30th June 2005
C
Answers:
A-- Tax year 2003
B-- Tax year 2004
C-- Tax year 2005
Exercise 2: Determine tax year pertaining to accounting periods given here under:
Sr  Classes of Tax Payers
Accounting Period
A
Mr. Aslam, a rice exporter (i)1st Jan 03 to 31st Dec 04
(ii)1st Jan 05 to 31st Dec 05
(iii)1st Jan 06 to 31st Dec 06
B
Mr. Kamal, a manufacturer (i)1st April 02 to 31st Mar 03
of shawls.
(ii)1st April 03 to 31st Mar 04
(iii)1st April 04 to 31st Mar 05
(iv)1st April 05 to 31st Mar 06
C
M/S XYZ, a company
(i)1st Oct 03 to 30th Sep 04
manufacturing sugar.
(ii)1st Oct 04 to 30th Sep 05
(iii)1st Oct 05 to 30th Sep 06
D
M/S ABC, Insurance
(i)1st Jan 02 to 31st Dec 02
Company.
(ii)1st Jan 03 to 31st Dec 03
(iii)1st Jan 04 to 31st Dec 04
(iv)1st Jan 05 to 31st Dec 05
Answer E-2: The tax years in the above exercise are special tax year.
A (i)
Special Tax year 2005
A (ii)  Special Tax year 2006
A (iii)  Special Tax year 2007
B (i)
Special Tax year 2003
B (ii)
Special Tax year 2004
B (iii)
Special Tax year 2005
B (iv)
Special Tax year 2006
C (i)
Special Tax year 2005
C (ii)
Special Tax year 2006
C(iii)
Special Tax year 2007
D (i)
Special Tax year 2003
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Taxation Management ­ FIN 623
VU
D (ii)  Special Tax year 2004
D (iii) Special Tax year 2005
D (iv) Special Tax year 2006
Tax Year ­ Points to Remember
 Normal Tax Year starts from 1st July and ends on 30th June (a period of twelve months).
 A tax payer can adopt a special Tax year after seeking approval from Commissioner of Income Tax
(CIT),
 Commissioner can withdraw the permission granted to adopt a special Tax year in respect of a tax
payer, if in the opinion of CIT it is not feasible. But CIT must notify the tax payer the reasons in
writing for withdrawal of permission granted to tax payer.
 A Tax Payer using special Tax year may revert to Normal Tax Year after seeking approval from
Commissioner of Income Tax (CIT).
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Table of Contents:
  1. AN OVERVIEW OF TAXATION
  2. What is Fiscal Policy, Canons of Taxation
  3. Type of Taxes, Taxation Management
  4. BASIC FEATURES OF INCOME TAX
  5. STATUTORY DEFINITIONS
  6. IMPORTANT DEFINITIONS
  7. DETERMINATION OF LEGAL STATUS OF A PERSON
  8. HEADS OF INCOME
  9. Rules to Prevent Double Derivation of Income and Double Deductions
  10. Agricultural Income
  11. Computation of Income, partly Agricultural,
  12. Foreign Government Officials
  13. Exemptions and Tax Concessions
  14. RESIDENTIAL STATUS & TAXATION 1
  15. RESIDENTIAL STATUS & TAXATION 2
  16. Important Points Regarding Income
  17. Geographical Source of Income
  18. Taxation of Foreign-Source Income of Residents
  19. Exercises on Determination of Income 1
  20. Exercises on Determination of Income 2
  21. SALARY AND ITS COMPUTATION
  22. Definition of Salary
  23. Significant points regarding Salary
  24. Tax credits on Charitable Donations
  25. Investment in Shares
  26. SALARY AND ITS COMPUTATION EXERCISES 1
  27. SALARY AND ITS COMPUTATION EXERCISES 2
  28. SALARY AND ITS COMPUTATION EXERCISES 3
  29. Tax treatment of Gratuity
  30. Gratuity Exercise
  31. PROVIDENT FUND
  32. Exemptions on Business income, Treatment of Speculation Business
  33. Deductions Allowed & Not Allowed
  34. Deductions: Special Provisions, Depreciation
  35. Methods of Accounting
  36. Taxation of Resident Company
  37. Taxation of Companies: Exercises
  38. Computation of Capital Gain
  39. Disposals Not Chargeable To Tax
  40. TAX RETURNS & ASSESSMENT OF INCOME UNIVERSAL SELF ASSESSMENT SCHEME
  41. Normal Assessment, USAS, Provisional Assessment, Best Judgment Assessment
  42. ADVANCE TAX COLLECTION & RECOVERY OF TAX PENALTIES & PROSECUTION
  43. What is Value Added Tax (VAT)?
  44. SALES TAX
  45. SALES TAX RETURNS