Till recently I was employed at a place where I was on contract, to be renewed every twelve months. Although nothing was stated on the contract, all the contractual employees there were charged 6% of their monthly income as income tax, regardless of whether the monthly salary was as low as Rs.10000 or in the lacs. On inquiry about why 6% was charged, the office told us it’s in Pakistan’s law that all contract employees must be charged this much, but they refused to provide any proof of the same.
Since then I have been searching for any proof of the above, but I am unable to find any. I have been to several websites but I do not understand the technical terms used. All I have found is income tax for the salaried class which starts at 5% on excess of Rs. 400,000/yr.
If anyone can help me with this, it would be great. I really want proof that 6% income tax is charged for contract employees, otherwise that means we all were being cheated out of our hard earned money and some action needs to be taken. Thanks.