What is tax?
The tax is a mandatory charge that citizens collect from the government to run government activities. These amounts are compulsory contributions by the citizens to fund the government. Taxes are considered financial obligations of residents of a state.
The ratio of taxation of the income of a salaried person or a business is called its tax rate. The tax rate is calculated according to the income of an individual or a business. It varies for the number of salaries and income of companies. For example, the amount of tax rate for a person having RS 6,000,00 monthly salary will pay 2.5% of his total amount. While the person earning RS 1200000 will pay 12.6% of his amount as tax.
Are you liable to pay taxes?
The payment of tax is a compulsion for the residents of Pakistan. Any individual is called a resident of a country /state if they did not stay in any other country for more than 185 days. These residents fall under the obligation of paying taxes. “pakistan salary tax calculator”
Tax rates are reviewed and revised following the incidences of higher incomes.
Penalty for not paying taxes
If you are a citizen of Pakistan and you fall under the obligation of paying taxes, then you are supposed to pay taxes on time. If you are not paying taxes on time, you will be penalized for it in the form of some increase in your payable taxes. For instance, if your payable tax is 50,000, your penalty will be 0.1% for each day. For salaried people, it is PKR 1000 per day.
Tax on your Capital Assets :
If you own capital assets, you must pay a tax of 1% of your entire property. This tax rate is applied to their amount according to the fair market rate only if the assets are immovable and are situated in Pakistan. Only in Pakistan are the capital assets taxed concerning their holding period. They are taxed only if the owner holds the property for six to seven years. But in foreign countries, capital assets are taxed at normal rates, and they don’t count the holding period for it.
Payment of super Tax is an obligation of individuals if their income exceeds PKR 150 million. The tax rate for such huge income ranges from 1-4% of the total income. For yearly income around PKR 300 Million, The tax rate ranges from 10%, which is applicable for one year.
In Pakistan, the rate of taxation for buyers ab sellers increased by 1-2%. If they are overseas Pakistani, they will normally pay tax, and the rest of the residents are supposed to pay 4% (seller) and 5% (buyer) if they are not active taxpayers.
Taxable income (PKR) Tax rate
600,000 1,200,000 2.5
1,200,000 2,400,000 12.5
2,400,000 3,600,000 20
3,600,000 6,000,000 25
6,000,000 12,000,000 32.5
12,000,000 2,955,000 35
Generally, the rates of taxes are decided according to the number of salaries of individuals and their business incomes on normal rates mentioned above, and it is deducted from their income irrespective of the holding period of their assets. These payable taxes vary from person to person, which is different for different goods and services or companies. Moreover, penalties are limited to those not paying taxes for a year or longer.