As per Lawkidunya, Income tax laws for individuals in Pakistan are governed by the Income Tax Ordinance, 2001. Here’s a breakdown of the key aspects:

Taxable Income in Pakistan

Taxable income includes income from five main sources:
– Salary: Income earned from employment exercised in Pakistan or paid by the federal government, a provincial government, or a local authority.
– Property: Rental income from immovable property in Pakistan.
– Business: Income from business operations in Pakistan.
– Capital Gains: Income from the sale of assets, such as property or securities.
– Income from Other Sources: Income from dividends, royalties, interest, and other sources.

Tax Rates in Pakistan

Tax rates vary based on income level and residency status. For resident individuals, the tax rates range from 5% to 35%. For non-resident individuals, the tax rate is 20%.

Residency in Pakistan

An individual is considered a resident if they’ve been present in Pakistan for at least 183 days in a tax year. Companies are considered resident if they’re incorporated in Pakistan or have their control and management situated in Pakistan.

Deductions and Exemptions in Pakistan

There are various deductions and exemptions available, including donations, charitable contributions, and expenses related to business or employment.

Filing Requirements in Pakistan

Taxpayers must file their tax returns electronically through the Federal Board of Revenue (FBR) portal. The tax year runs from July 1 to June 30, and tax returns must be filed by September 30 for individuals and December 31 for companies.