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Profit on Debt
07-18-2011, 05:03 AM
Post: #16
 
In my opinion a person is saved from double taxation.
If that credit was not available than as per the above example Rs. 25 would have to be paid in aggregate i.e 15 in Pakistan and 10 in foreign country.
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07-18-2011, 05:33 PM
Post: #17
 
Student of law, i think you are right as i have gone through 103 and following sub sections;

Sec 103(2) For the purposes of clause (b) of sub-section (1), the Pakistan tax
payable in respect of foreign source income derived by a taxpayer in a tax year
shall be computed by applying the average rate of Pakistan income tax
applicable to the taxpayer for the year against the taxpayers net foreign-source
income for the year.

#8213;average rate of Pakistan income tax#8214; in relation to a taxpayer for a
tax year, means the percentage that the Pakistani income tax (before
allowance of the tax credit under this section) is of the taxable
income of the taxpayer for the year;

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