As per Lawkidunya, Section 149 of the Pakistan Income Tax Act, 2001 deals with the tax deduction at source from salaries. Here’s a breakdown:

Tax Deduction at Source

1. Employer’s Obligation: Every employer is required to deduct tax from the salary paid to an employee, if the salary exceeds PKR 50,000 per month.
2. Tax Deduction Rate: The tax deduction rate is determined by the Federal Board of Revenue (FBR) and is applicable to the taxable income of the employee.
3. Taxable Income: Taxable income includes all types of remuneration, such as basic salary, bonuses, allowances, and benefits in kind.

Exemptions and Deductions

1. Medical Allowance: Exempt up to PKR 10,000 per month.
2. Phone Bills: Exempt up to PKR 1,000 per month.
3. Housing Rent: Exempt up to PKR 10,000 per month (subject to conditions).
4. Conveyance Allowance: Exempt up to PKR 10,000 per month.
5. Charitable Donations: Deductible up to 10% of taxable income.

Filing Requirements

1. Tax Returns: Employers must file tax returns (Form IRIS) and provide a certificate (Form S) to employees by June 30th of each year.
2. Statement of Deduction: Employers must provide a statement of deduction (Form S) to employees, showing the amount of tax deducted.

Penalties

1. Failure to Deduct Tax: Employers who fail to deduct tax or deduct tax at a lower rate than required are liable to pay a penalty.
2. Failure to File Tax Returns: Employers who fail to file tax returns or provide a certificate (Form S) to employees are liable to pay a penalty.
Please note that these rules are subject to change, and individual circumstances may affect the actual tax payable. It’s always a good idea to consult with a tax professional or the Federal Board of Revenue (FBR) for the most up-to-date information.