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First Schedule (4th Division) of the Income Tax Ordinance 2001

4th Division of the First Schedule of the Income Tax Ordinance 2001 deals with the Rate of Tax on Certain Payments which fall in section 6 of Income Tax Ordinance 2001. Rate of Tax on Certain Payments to Non-Residents (Section 6, First Schedule, Division-IV, Part 1) In Case of Royalty or Fee for Technical Services 15% of the Gross Amount In any other Case 10% of the Gross Amount What is Section 6 of the Income Tax Ordinance 2001? Every Non-resident person who receives any Pakistan - source royalty fee for offshore digital services or fee or payment for technical services or assistance. The tax imposed under sub-section (1) on a non-resident person shall be computed by applying the relevant tax rates to the gross amount of the royalty free for offshore digital services or the fee for technical services. This section shall not apply to any royalty where the property or right giving rise to the royalty is effectively...
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First Schedule (3rd Division) of the Income Tax Ordinance 2001

3rd Division of the First Schedule of the Income Tax Ordinance 2001 deals with the Tax Rate on Dividends Tax Rate on Profit on Debts Tax Rate on Return on Investment in Sukuks received from a special purpose vehicle Rates of Dividend Tax (Section 5, First Schedule, Division-III, Part 1) Received from IPPs 7.5% Received from Mutual Funds & Others 15% Received from Companies 25%   Rate of Tax on Profit on Debt (Section 7B, First Schedule, Division-IIIA, Part 1) Imposed under section 7B 15%   Rate of Tax on Return on Investment in Sukuks received from special purpose vehicle (Section 5AA, First Schedule, Division-IIIB, Part 1) In case of a Company 25% In case of an individual or AOP when profit is more than 1 Million 12.5% In case of an individual or AOP...
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First Schedule (2nd Division) of the Income Tax Ordinance 2001

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The Second Division of the first schedule of the Income Tax Ordinance provides the tax rates for the companies. Companies can be divided into three types i.e. Small Companies, Banking Companies, and Any other Companies. The rate of tax for small companies is 20%, for banking companies 39%, and for any other companies 29%. However, certain types of companies may be eligible for a super tax, for a reduced tax rate or exemption, depending on their business activities. For example, companies engaged in the export of goods or services may be eligible for a reduced tax rate of 25% or less of the total income. Similarly, companies involved in IT & IT-enabled services and exporting them are only liable to pay 1% of their income as final tax in Tax year 2022-23. The tax rate for super tax is 4% of the taxable income, in addition to the regular income tax rate. However, for banks, the tax rate is 3% of the taxable income. It is increased from 4% to 10% for those individuals, Association of P...
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First Scheduled

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The First Schedule of Income Tax Ordinance can be divided into 27 Divisions. Division 1 provides the rates of tax imposed on the taxable income of every individual and Association of Persons (AOP). If the income of an individual under the head of Salary does not exceed 50% of his taxable income (it may have multiple sources of income), the tax rates to be applied shall be as set out in the following table. If the income of an individual under the head of Salary does exceed 50% of his taxable income  (it may have multiple sources of income), the tax rates to be applied shall be as set out in the following table.      3. If the income of an individual except for salary income and Association of Persons (AOP) shall apply the tax on the following rates. Note: These Rates are not updated. Please see Tax Card for the relevant period.
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Location: Pakistan
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Summary of Income Tax Ordinance 2001

 Income Tax Ordinance 2001 can be divided into 13 Chapters. These Chapters are Preliminary Charge of Tax Tax on Taxable Income Common Rules Provisions Governing Persons Special Industries International Anti Avoidance Minimum Tax Procedure Administration Transitional Advance Tax Provisions Miscellaneous Income Tax Ordinance 2001 has 14 schedules of Income.
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