Super Tax on High Earning Persons for Tax Year 2023
A new section 4C has been
introduced through Finance Act, 2022 and this section will apply for tax year
2022 and onwards. Except for the persons whose income as envisaged in this
section is below Rs. 150 million, all other persons including those assessed
under Fourth, Fifth and Seventh Schedules to the Ordinance are liable to pay
super tax on graduated rates ranging from 1% to 4% based on graduated income
slabs provided in Division JIB of Part I of First Schedule given as under:
Income under section 4C Rate of Tax
Where income does not exceed Rs.
150 million 0% of the income
Where income exceeds Rs. 150 million
but does not exceed Rs. 200 million 1% of
the income
Where income exceeds Rs. 200 million
but does not exceed Rs. 250 million 2% of
the income
Where income exceeds Rs. 250 million
but does not exceed Rs. 300 million 3% of
the income
Where income exceeds Rs. 300
million 4%
of the income
However, for tax year 2022 the
rate of super tax under this section will be 10% instead of 4%, where the
income of the persons engaged, partly or wholly, in business of airlines,
automobiles, beverages, cement, chemicals, cigarette & tobacco, fertilizer,
iron & steel, LNG terminal, oil marketing, oil refining, petroleum &
gas exploration and production, pharmaceuticals, sugar and textiles exceeds
Rs.300 million. For tax year 2023, this super tax on income of banking
companies will be 10% if the income for the year exceeds Rs. 300 million. For
the purposes of this section, the income will be the sum of the following:
Profit on debt, dividend, capital
gains, brokerage, and commission;
Taxable income (other than
brought forward depreciation and brought forward business losses) under section
9 of the Ordinance, excluding amounts specified in (i) above;
Imputable income as defined in
clause (28A) of section 2 excluding amounts specified in clause (i) above; and
Income computed, other than
brought forward depreciation, brought forward amortization and brought forward
business losses under Fourth, Fifth and Seventh Schedule.
Super tax payable under this
section will be paid on the date and manner as specified in under section
137(1) of the Ordinance. In case of default by the person liable to pay super
tax under this section, Commissioner through an order in writing will determine
the liability of the person and proceed to recover the same under applicable
provisions of the Ordinance.
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