I need guidance and advice with regards to Income tax in Pakistan. All my career has been outside Pakistan and so have been all my earnings. I bought a property in D-12 Islamabad worth 70 lacs last year. there was additional Tax ( CST i think) around 2 lacs which i paid. I received a postal mail from Income tax deprtment directly at my local address in Pakistan refering to this purchase and asking me to open an income tax account in Pakistan since they dont have one under my name. Apparenly, they want me to be in the tax net in future.
My quesitons:
1. Is my foreign income in Pakistan taxable ? I dont have any earning in Pakistan.
2. Considering I always used legal channels to send remittance and bought this plot, does this exempt me from paying income tax ?
3. How should I reply to this letter ?
My point is that if I am not earning in Pakistan, why should I pay the income tax. But I am may be wrong so I would need advice from those who are aware of the rules or who have experienced the same.
Thanks,
Fisal Habib replied on Wednesday, September 14, 2011 08:07 AM
Your foreign Income is not Taxable, Your incomes on Bonds, stock, rent all Collective is taxable You may need to decalre your assests If You open a Tax file At present there is no wealth Tax in pakistan. To satisfy Tax Dept You might have to show How 70 Lac Tansection took place that needs the evidence of Transfer of Money From Abroad. For All Overseas Friends. when buy a property in Pak always do transection by legal Channels ie Bank to Bank [no Hundi at all] Keep a record of that Transection slip and Bank statement in Pakistan of that period. Banks are not obliged to keep statement record More than 10 ys, and to obtain a Bank record older tha 3 years is also a headache asBanks's sofware continue changing every now and then Regards not realted to above post recently i have been impressed by Visiting Edhi Foundation if you have some donation etc pls see info on following page if you want to donate to Edhi Trust http://www.edhifoundation.com/contact.asp |
Faisal / Riyadh replied on Wednesday, September 14, 2011 09:49 AM
Thanks Habib for the reply. Do I have to open the tax file ? even though I will not pay any tax. any pros/ cons to opening tax file. I just dont want the tax authorities to follow me once I open the tax file. regards, Faisal |
Habib replied on Wednesday, September 14, 2011 11:34 AM
yes if they asked you then you will have to but not necessily Tax is due, a Tax Consultant can guide you for that. Minimum will be to send an official registered letter to the office who asked for Tax Returns, attach copies of evidence. This letter will be registered and in case of future issue will serve as reference that you officially replied the Tax Dept. |
Faisal replied on Wednesday, September 14, 2011 01:45 PM
Thanks a lot Habib ! for your advice ! |
May pod jeddah replied on Wednesday, September 14, 2011 06:11 PM
Dear Faisal The advice from habib is valuable. The best thing is to get a recent tax advice from some tax professional. This will cost you much may be couple of thousand rupees but it's worth considering latest rules and regulation |