Foreign Income Tax credit - Printable Version +- Accountancy Forum (https://www.accountancy.com.pk/forum) +-- Forum: The Profession (https://www.accountancy.com.pk/forum/forumdisplay.php?fid=4) +--- Forum: Tax (https://www.accountancy.com.pk/forum/forumdisplay.php?fid=8) +--- Thread: Foreign Income Tax credit (/showthread.php?tid=10660) |
Foreign Income Tax credit - Information Consultant - 01-02-2012 Dear Friend Pls confirm the following working is correct or it require correction. c) Example Mr. As income for the tax year 2008 is as under Pakistan source income Taxable salary 800,000 Tax deducted from salary 60,000 Taxable capital gain 200,000 Foreign source business income not exempt under tax treaty 300,000 Foreign tax paid in the foreign country @ 10% 30,000 Solution Taxable salary 800,000 Taxable capital gain 200,000 Foreign source income 300,000 Taxable income 1,300,000 Tax liability (salaried case) Income tax on 1,300,000 @ 12.5% 162,500 Less Foreign tax credit a) Pakistan average rate of tax applicable on foreign source income 162,500/1,300,000 x 300,000 37,500 b) Foreign income tax paid 30,000 Whichever is lower 30,000 Total tax liability 132,500 Less Tax deducted from salary 60,000 Tax payable with return of income 72,500 - student_of_law - 01-02-2012 In my opinion your working is in accordance with section 103 of ITO, 2001 and it is correct. - Information Consultant - 01-03-2012 Thanks Same treatment in case if a business individual ,partner of firm and director of company earned foreign income apart of local income ? |