ghazi52
PDF THINK TANK: ANALYST
- Joined
- Mar 21, 2007
- Messages
- 103,045
- Reaction score
- 106
- Country
- Location
Tax authorities have also proposed that the house rent being availed by the judiciary should be taxed in the budget, which is aimed at ending disparity in the tax law.
The cost of tax-free house rent allowance to judges of the Supreme Court and high courts was only Rs32 million in the previous fiscal year, but it leads to discrimination.
Similar proposals had also been made in the previous budgets, but they were eventually shot down by the political leadership.
Tax authorities have suggested to the government to rewrite the text of a clause of the Income Tax Ordinance through the Finance Bill 2021 aimed at plugging a lacuna that led to a court judgement to exempt the judicial allowance from income tax, said the sources.
Last month, the FBR had exempted judicial allowances from income tax by honouring court judgements. The tax machinery notified that the “judicial allowance and special judicial allowance are exempt from tax not only in cases of superior judiciary but also in the case of subordinate judiciary.”
The exemption was given in compliance with the July 2020 judgement of the Sindh High Court (SHC) and 2017 judgement of the Peshawar High Court (PHC).
“The special judicial allowance granted to the petitioners was in appreciation of their performance of duties and thus would not fall within the scope of salary, and thereby not chargeable to income tax,” said the SHC judgement.
Judicial allowances are up to 300% over and above the basic salaries being drawn by members of the judiciary and their establishments.
Sources said that the FBR has proposed to rewrite the relevant tax clauses that led to the exemption.
The FBR is of the view that with the exhaustive definition of the term salary given under Section 12 of the Income Tax Ordinance 2001, it was clear that all the benefits and allowances were part of the salary income, and therefore, rightly subjected to withholding of income tax by the Accountant General of Sindh.
tribune.com.pk
The cost of tax-free house rent allowance to judges of the Supreme Court and high courts was only Rs32 million in the previous fiscal year, but it leads to discrimination.
Similar proposals had also been made in the previous budgets, but they were eventually shot down by the political leadership.
Tax authorities have suggested to the government to rewrite the text of a clause of the Income Tax Ordinance through the Finance Bill 2021 aimed at plugging a lacuna that led to a court judgement to exempt the judicial allowance from income tax, said the sources.
Last month, the FBR had exempted judicial allowances from income tax by honouring court judgements. The tax machinery notified that the “judicial allowance and special judicial allowance are exempt from tax not only in cases of superior judiciary but also in the case of subordinate judiciary.”
The exemption was given in compliance with the July 2020 judgement of the Sindh High Court (SHC) and 2017 judgement of the Peshawar High Court (PHC).
“The special judicial allowance granted to the petitioners was in appreciation of their performance of duties and thus would not fall within the scope of salary, and thereby not chargeable to income tax,” said the SHC judgement.
Judicial allowances are up to 300% over and above the basic salaries being drawn by members of the judiciary and their establishments.
Sources said that the FBR has proposed to rewrite the relevant tax clauses that led to the exemption.
The FBR is of the view that with the exhaustive definition of the term salary given under Section 12 of the Income Tax Ordinance 2001, it was clear that all the benefits and allowances were part of the salary income, and therefore, rightly subjected to withholding of income tax by the Accountant General of Sindh.
Govt may levy tax on pensions | The Express Tribune
Govt is considering imposing income tax on monthly pensions of over Rs200,000 and may slap the tax on judicial allowance and house rent in the next budget.
tribune.com.pk
