Question # 1: What is Individual resident status explain its different points?
Answer: Resident Individual (Section 82)
=> An individual shall be a resident individual for a tax year if the individual-
=> Is present in Pakistan for a period of, or periods amounting in aggregate to, one hundred and eighty-three days or more in the tax year; or
=> Is an employee or official of the Federal Government or a Provincial Government posted abroad in the tax year
Residential Status and Taxation Rules Governing Resident Individual:
=> A day of leave including sick leave
=> A day that individual’s activity is stopped because of strike etc
=> A holiday spent in Pakistan
Rules Governing Resident Individual
=> Part of day shall be counted as a whole day, for example day of arrival or day of departure
Following days shall be counted as whole day:
=> A Public Holiday
=> A day of leave including sick leave
=> A day that individual’s activity is stopped because of strike etc
=> A holiday spent in Pakistan
Question # 2: If Mr. Kamal resident of Pakistan suffered a foreign loss against the income received from foreign country in tax year. What is the treatment of such foreign loss? Which section deals this kind of loss? Such losses can be carried forward up to how many years?
Answer: Foreign losses Sec.104:
Deductible expenditures incurred by a person in deriving foreign-source income chargeable to tax under a head of income shall be deductible only against that income.
Question # 3: What is association of person and how profit will be distributed among partners?
Answer:
• Sec 93 (6) the share of a member in the total income of a association of persons shall be determined according to the member’s interest in the association and shall include any profit on debt, brokerage, commission, salary or other remuneration received or due from the association.
• Salary sec 12(1): any salary received by an employee in a tax year, other than salary that is exempt from tax under this Ordinance, shall be chargeable to tax in that year under the head “Salary”.
