Procedure for Assessment and Collection of Tax

Topics: Taxation, Capital asset, Taxation in the United States Pages: 31 (9312 words) Published: October 9, 2010
Procedure for Assessment and Collection of Tax

Course: Taxation Management
Semester: Summer’2010
Submitted By: Atiqua Masood Saya (8090)
Preeti Adwani (7958) Shumaila meer (7583)
Shafaq Zehra Rehmani (12044)
Urooj Bibi (7218)
Submitted To: Mr. Farrukh Ansari

Submitted On: 25st July’ 2010

LETTER OF ACKNOWLEDGEMENT

July 25, 2010

Dear Readers,
A project of this nature and magnitude was a very good learning experience. We owe a debt of gratitude to those people who aided us in the compilation of this report.

Firstly, we thank Almighty Allah for giving us the strength to compile this report. For general information and guidance, we are especially indebted to our invaluable instructor Mr. Farrukh Ansari. We would also like to thank our senior students, who are always there to help and guide us whenever needed.

Thanking you.

Sincerely,
Atiqua masood
Preeti Adwani
Shumaila meer
Shafaq Zehra Rehmani
Urooj Bibi

LETTER OF TRANSMITTAL

July 25, 2010
Mr. Farrukh Ansari (Instructor)
Taxation Management
Iqra University,
Karachi .

Dear Mr. Farrukh Ansari,
Here is the report, which you authorized us for the course of Taxation Management, which had been an essential part of our curriculum for the course. This report discusses about the procedure for Assessment and Collection of Tax. We have been able to apply the concepts taught by you in this report and would like to show gratitude for providing us the necessary guidelines to be a successful taxation manager in future.

Sincerely,
Atiqua masood Saya
Shumaila meer
Preeti Adwani
Shafaq Zehra Rehmani
Urooj Bibi

INCOME TAX
Taxation according to a person’s ability to pay is universally accepted principle, and income is considered a satisfactory though not a sufficient index of such ability to pay. Income Tax is, therefore, generally recognized as a highly equitable form of taxation. A tax levied on income can be normally shifted to others and thus its incidence is on those for whom it is intended. Since income tax is progressive in nature, it tends to reduce economic disparity. Tax rates and method of calculating taxable income varies with fiscal status of the tax payer. Following are the broad categories of taxpayers:- Companies

Association of Persons (AOP)
Non Salaried Individuals
Salaried individuals

INCOME
“Income” includes any amount chargeable to tax under this Ordinance, any amount subject to collection or deduction of tax under section 148, 150, 152(1), 153, 154, 156, 156A, 233, 233A and, sub-section (5) of section 234, any amount treated as income under any provision of this Ordinance and any loss of income but does not include, in case of a shareholder of a company, the amount representing the face value of any bonus share or the amount of any bonus declared, issued or paid by the company to the shareholders with a view to increasing its paid up share capital.

TAX ON TAXABLE INCOME
(1) Subject to this Ordinance, income tax shall be imposed for each tax year, at the rate or rates specified in Division I or II of Part I of the First Schedule, as the case may be, on every person who has taxable income for the year. (2) The income tax payable by a taxpayer for a tax year shall be computed by applying the rate or rates of tax applicable to the taxpayer under this Ordinance to the taxable income of the taxpayer for the year, and from the resulting amount shall be subtracted any tax credits allowed to the taxpayer for the year.

(3) Where a taxpayer is allowed more than one tax credit for a tax year, the credits shall be applied in the following order – (a) Any foreign tax credit allowed under section 103; then
(b) Any tax credit allowed under Part X of Chapter III; and then (c) Any tax credit allowed under sections...

References: 1. FBR website
2. Khalid Petiwala’s Tax notes
3. Tax Ordinance 2001.
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