Law: Income Tax Ordinance, 2001

Section: 12,149,131,132,12(2)(e)(iv),132(2)

Law: Income Tax Appellate Tribunal Rules, 2005

Section: 20,20(2)

Law: Federal Tax Ombudsman Ordinance, 2000

Section: 2,2(3),9,10,11

Income Tax Ordinance (XLIX of 2001)---Ss. 12 & 149---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss.2(3), 9, 10 & 11---Tax on salary---Complainant salaried person, had stated that in addition to salary he also received 18% of his Provident Fund Balance as income from the trust---12.5% investment income was taken as exempt; and balance was made part of salary in terms of S.12(2)(e)(iv) and S.149 of Income Tax Ordinance, 2001; and same was subjected to withholding tax---Due to addition of Provident Fund income, salary income got increased attracting higher bracket of tax rate---Complainant had pointed out that in his case tax had been adjusted at about 11%, which was much higher than average rate of tax at about 4%---Complainant had prayed that tax amount be either deducted from salary so that Provident Fund was not reduced or it be deducted from Provident Fund Balance at an average rate of tax---Complainant had further claimed that Public Corporation, like PIAC and PNSC etc. were giving different treatment to the income received by the employees from recognized Provident Funds Trust and there appeared to be a confusion among various organizations on the treatment of such income received by their employees---Point raised by the complainant, appeared to be a systemic issue which needed to be addressed by the Federal Board of Revenue to allay confusion and discrimination in the matter and also in the interest of justice/equity---Higher rate of tax, arbitrarily attributed to profit of Provident Fund amount for deduction from the Provident Fund, appeared unjustified---Recommendations were made to Federal Board of Revenue to clarify, whether Pak Steel, was correctly applying rate of higher tax on the taxable profit received by its employees on their Provident Fund Balance, or should the taxable profit from Provident Fund be treated as "Income from other sources" in the interest of equity and justice; to clarify, whether income allocable to an employee from recognized Provident Fund on fixed percentage basis, could be taken as 'Profit on debit/interest'; and could be subjected to threshold under clause 3(b) of Part 1 of Sixth…

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