CIRCULAR-LETTER NO: 3(67)ITI/72 DATED: 07/05/1973

SROS: CIRCULAR-LETTER NO: 3(67)ITI/72 DATED: 07/05/1973 COMPUTATION OF TAX PAYABLE BY THE FIRMS AND EXPORT REBATE ADMISSIBLE UNDER PARAGRAPH A(2) OF PART IV OF THE FIRST SCHEDULE CIRCULAR-LETTER NO: 3(67)ITI/72 DATED: 07/05/1973 CENTRAL BOARD OF REVENUE Subject: COMPUTATION OF TAX PAYABLE BY THE FIRMS AND EXPORT REBATE ADMISSIBLE UNDER PARAGRAPH A(2) OF PART IV OF THE FIRST SCHEDULE Board has received a number of representations about the method of computation being followed by some assessing officers in allowing export rebate under Paragraph A(2) of Part IV of the First Schedule. Assessing officers first deduct export rebate from super tax payable by a registered firm and the balance so arrived at is then deducted from the income to determine the divisible income for allocation amongst partners of the firm. (2) Under the provisions of section 10(1) of the Income Tax Ordinance, super tax is leviable on the total income of a registered firm. To work out a partners share of profit from the firm, section 69(4) provides for deduction of super tax payable by the firm from its total income. The balance so arrived at is dividend amongst partners in the ratio of their shares in the firm. It would not be correct to deduct any other figure from the total income of the firm to determine the divisible income. Allowance of export rebate in respect of super tax payable by a firm, as provided under provision quoted in the subject, would not affect the method of computation normally followed in such cases. To arrive at the…