Tax Free Living in Pakistan

[yazdi]

Re: Tax Free Living in Pakistan

@kakaballi

It is taxable but is deducted at source. If I get dividend/salary from a corporation, it is already taxed at source BY the business.

Your argument is like if I get my salary from my company and tax is already deducted by my employer (and it will if be if it is an incorporated business), I will have to pay it again to the tax authorities. ABSURD.

Tax deductible at source is a sort of pre payed tax… adjustable towards the final tax liability. Some taxes deducted at source are minimum tax liability for that revenue realized, irrespective of the profit.. and in some cases but not necessarily a final discharge of tax liability..

For example I earn salary, dividend, and business income. Tax deducted at source from my salary/dividend can not be adjusted towards my business income. However my personal tax liability will be tax for salary earned + tax for dividend earned + tax payable on business income.

Take for example I am doing import business which is the sole business I am doing. I can adjust the tax deposited at import stage against my final tax liability if the tax on profit is more than the pre payed tax… however tax deposited at import stage is the minimum tax liability for the import operation.

I hope the terminology I have used is not too technical for you… if there is any thing you don’t understand I can elaborate further. i have tried to keep it as simple as I can..!!!

Just remember tax deducted at source is just a pre payment, not necessarily your final discharge of liability.