08-13-2011, 02:00 AM
please clarify zakat deducted by bank at the time of payment of profit on debt is deductible allowance or not. <blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by student_of_law</i>
<br />According to s.9 ITO,2001, taxable income is worked out by deducting Zakat from total income.
Further s. 60 says that a person shall be entitled to a deductible allowance for the amount of any Zakat paid ....... According to s.2(16), <u>deductible allowance is deductible from total income.</u>
Hence Zakat paid is to be deducted from total income not from tax liability.
Zakat to Edhi or deducted by Bank, shall be deducted from total income. Remaining will be taxable income. (Total Income - Zakat) = Taxable Income. On the basis of taxable income you will determine your tax rate in accordance with the First Schedule
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<br />According to s.9 ITO,2001, taxable income is worked out by deducting Zakat from total income.
Further s. 60 says that a person shall be entitled to a deductible allowance for the amount of any Zakat paid ....... According to s.2(16), <u>deductible allowance is deductible from total income.</u>
Hence Zakat paid is to be deducted from total income not from tax liability.
Zakat to Edhi or deducted by Bank, shall be deducted from total income. Remaining will be taxable income. (Total Income - Zakat) = Taxable Income. On the basis of taxable income you will determine your tax rate in accordance with the First Schedule
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