Salient Features Income Tax Measures, Reliefs

Following are the salient features of Income Tax measure and reliefs proposed by the government for FY 2021-22 -Special regime for export of services at par with export of goods to be taxed @ 1% under final tax regime

ISLAMABAD, (UrduPoint / Pakistan Point News - 11th Jun, 2021 ) :Following are the salient features of Income Tax measure and reliefs proposed by the government for FY 2021-22 -Special regime for export of services at par with export of goods to be taxed @ 1% under final tax regime.

-Elimination of block taxation of property income and shift to normal tax regime.

- Reduction of block taxation on capital gain on disposal of immoveable properties if gain exceeds Rs. 20 million.

-Reduction in block taxation on interest income, if it exceeds Rs. 5 million.

-Tax on "on" money on vehicles, if vehicle is disposed without registration.

- Expansion of scope of withholding tax collection from supply chain below manufacturers and importers of specified sectors (sections 236G and 236H).

- Reduction in threshold of monthly electricity bill for withholding tax on electricity consumption from 75,000 to 25,000 from domestic users not appearing on Active Taxpayers' list.

-Removal of requirement of issuance of separate notice in concealment cases.

- Withholding of tax on rental income of sub-lessee.

- Broadening of scope of withholding agents for the purpose of collection of withholding tax on commission income (section 233).

- Streamlining withholding tax collection on sale and purchase of immoveable property (section 236C and 236K).

- Rationalization of withholding tax regime for exporters.

- Taxability of profit on debt component of GP fund and other such funds.

Withdrawal of personal income tax exemptions During the current financial year, Tax Laws (Second Amendment) Ordinance, 2021was promulgated to implement corporate income tax reforms to provide level playing field to all businesses. Certain tax credits, concessions and exemptions were withdrawn. The provisions of the Ordinance have been made part of the Finance Bill.

-Reduction in generalized rate on Minimum Tax on Turnover basis and increase in threshold for individuals and AOPs for chargeability of minimum tax.

-Broadening of scope of IT services by inclusion of cloud computing and data storage services.

- Exemption to Special Economic Zone Enterprises from payment of minimum tax.

-Ten year tax exemption for Special Technology Zone Authority, Zone Developers and Zone Enterprises.

- Tax exemption on the import of capital goods and dividend income of private funds from investment in special technology zone enterprise.

- Introduction of special tax regime for manufacturing SMEs.

- Exemption from tax on income of deep conversion new refineries and BMR projects of existing refineries for 10 years.

-Reduced rate of withholding tax of 3% on oilfield services, warehousing services, logistic services, collateral management services and telecommunication services.

- Inclusion of telecommunication services in definition of industrial undertaking.

- Exemption to Electronic warehousing receipts traded on Pakistan Mercantile Exchange.

- Allowance of provincial WWF and WPPF as a deductible allowance while calculating income.

- Adjustment of business loss against property income.

- Unconditional grant of exemption from tax to certain organizations.

- Withdrawal of power of Commissioner to reject advance tax estimates presented by taxpayer.

- Non recognition of gain/loss on disposal of assets to non-residents under gift from relative, inheritance and agreement to live apart.

- Reduction in tax rate on capital gain tax on disposal of securities from 15% to 12.5%.

- Withdrawal of power of tax authorities to conduct inquiry under section 122(5A).

- Inclusion of live animals, raw hides and unpackaged meat in definition of agriculture produce.

- Reduction in tax liability by 25% for women entrepreneurs.

- Exemption from tax on import of books and agriculture equipment.

- Exemption from tax for bagasse fired power generating units and reduced rate of tax on dividend income from such projects.

- Extension in time limits for availing tax benefits under section 100D and Eleventh schedule vide Income Tax (Amendment) Ordinance 2021 dated 21.02.2021 made part of the bill.

-Tax exemptions and concessions for Roshan digital accounts and implementation of electric vehicles and mobile phone policy implemented vide Tax Laws (Amendment) Ordinance, 2021 dated 11.02.2021 made part of bill.