Circular No. 06 of 2008, Islamabad, 10th July, 2008

CORRIGENDUM OF CIRCULAR NO. 6 OF 2008 GOVERNMENT OF PAKISTAN REVENUE DIVISION FEDERAL BOARD OF REVENUE **** C.No. 4(5)ITR/06 Islamabad, 26th July, 2008 Subject: - CORRIGENDUM OF CIRCULAR NO. 6 OF 2008 Circular No. 06 of 2008, Islamabad, 10th July, 2008:- Several communications have been received in the Board wherein it has been pointed out that percentages of marginal tax relief applied in some examples given in the aforesaid circular for computation of marginal tax relief are not in consonance with the income tax slabs. The matter has been examined and found that inadvertently in some examples the percentage of tax on marginal increase in income was not applied according to the 2nd proviso to Para 1-A, of Part -I of First Schedule to the Income Tax Ordinance, 2001. The inconvenience caused due to the said mistake is regretted. The revised and corrected examples have been incorporated in the original circular. (Javed Iqbal Rana ) Secretary (ITR) GOVERNMENT OF PAKISTAN REVENUE DIVISION FEDERAL BOARD OF REVENUE **** C.No. 4(5)ITR/06 Islamabad, 10th July, 2008 Circular No. 06 of 2008 (Income Tax) Subject: - COMPUTATION OF INCOME TAX PAYABLE BY THE SALARIED TAXPAYERS FOR TAX YEAR 2008 CHANGES MADE THROUGH THE FINANCE ACT 2008 CLARIFICATION REGARDING. 1. Computation of tax in the case of salaried person is governed by sections 12,13 and 14 of Income Tax Ordinance 2001 read with rules 3 to 7 of the Income Tax Rules 2002. Where salary income constitutes more than 50% of the total income of a taxpayer the total income shall be charged to tax at the rates provided in para (1A) of Part 1 of the First Schedule. All perquisites, allowances or benefits, [except those covered under Part-1 of the Second Schedule to the Ordinance], are to be included in the salary income. The taxation of salaried taxpayers in the light of amendments made through Finance Act, 2008, is explained as under:- 2. INCREASE IN BASIC THRESHOLD The basic exemption for salaried person has been enhanced from Rs. 150,000/- to Rs. 180,000/-. For the women taxpayer this limit will be Rs. 240,000/-. The tax slabs have also been revised. These changes have been brought through Finance Act, 2008 and will be…