Tuesday, December 17, 2013

   Following important amendments have been made in the Federal Budget in the Income Tax Law some of which are of far reaching importance.These are as under.

1)Self Scheme

   The amendment to section 59(1)proposes to reintroduce self for which a scheme has been issued to define the procedure and cases in which the benefit of the Scheme will be available or not.

a)The Scheme is restricted for availment by;1)Individ uals,Hindu Undivided Familities,Firms (both registered and unregistered) and association of person; (i)whose income is blew Rs. 200,000; (ii)whose last assessed income was below Rs 200,000; (iii) declaring income not liable to tax; (iv) filing return of income by due date of extended date;ad (v)Making payment of tax payable u/s 54) with the return of income, in full.

b)The Scheme is not available beneficially to ;(i)companies(ii)whose income is not liable to tax;particular of income and supporting documents prescribed are not filed in time;

c)The Scheme may cease to apply in cases; (i)where the return of the is included in 5 per cent returns , selected for audit; (ii) where evidence of concealment is available ; and (iii)where legal issues are pending.

2)Deduction not Admissible

      Section 24 (ff) proposes to disallow and expenditure excecding Rs; 25,000, for deduction from the "total Income".if the amount is not paid by a cross cheque or bank draft.

3)Donation for Charitable purposes

                 Section 47 (3) proposes the amendment to restrict the ceiling for different categories to Rs. 500,000 or 5 percent of the income,whichever is less.

4)Casual income 

     Casual non-recurring income has been totally exempt under cl.(65) of the Second Schedule .The Finance bill 1990 proposed to restrict such exemption to a limit of Rs. 24,999. Such Income of Rs . 25,000 and above,whether derived from Prize Bond,or winning on raffle,lottery or cross-word puzzel,entails responsibility ,on the payer or such amount,to deduct advance tax,at the time of proposed to be a space block of income.

5)Dividend Income (Clause(80) )

     Devidend Income from NIT,Matual Funds of ICP,listed companies Modarbas Banks PLS account ICP state ENterprise Mutual Funds Companies enjoying exemption under clause (139) for technical services outside Pakistan and open close end mutual Funds of Investment companies exempt upto Rs. 15,000 which exemption is now proposed to be restricted upto dividend income of Rs. 10,000.00..***

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