Tax on Visiting Faculty Members

Imran Hafeez · 03-02-2011, 01:47 PM

I am an permanent employee with an organization but at the same time teach as a visiting faculty member in universities.

Universities pay me on hourly basis and deduct 6% from my payments.

Will my payment from universities come under rendering services or under executing contract?

As per income tax ordinance, services are restricted to

#8213;services#8214; includes the services of accountants, architects,
dentists, doctors, engineers, interior decorators and lawyers,
otherwise than as an employee

If teaching doesnt come under services, then what will be the treatment of my above mentioned income?

Imran Hafeez · 03-02-2011, 06:26 PM

Can anyone help me in resolving above mentioned issue?

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by Imran Hafeez
 I am an permanent employee with an organization but at the same time teach as a visiting faculty member in universities.

Universities pay me on hourly basis and deduct 6% from my payments.

Will my payment from universities come under rendering services or under executing contract?

As per income tax ordinance, services are restricted to

#8213;services#8214; includes the services of accountants, architects,
dentists, doctors, engineers, interior decorators and lawyers,
otherwise than as an employee

If teaching doesnt come under services, then what will be the treatment of my above mentioned income?
<hr height="1" noshade id="quote"></blockquote id="quote">

LapTop · 03-02-2011, 06:26 PM

Ap jis organization k permanent employee han wahan say to ap ki income hay wo salary income hay or us par tax U/S 149 lagy ga,

Jis university say ap hourly basis par payment laity han, wo U/S 153( c) may aati hay, or us par 6% k hisab say hi income tax withheld hona chayea.

Imran Hafeez · 03-02-2011, 06:33 PM

The problem is i havent signed any formal contract with the university. It is a verbal understanding that if there will be a shortage of permanent teachers, i will teach a course and will be paid on hourly basis. if no course available, i will not be paid anything. Will it still come under U/S 153( c)-contracts.

Some accountant told me that payment from unversity will come under services, that is U/S 153(b). But IT Ordinance says services includes the services of accountants, architects,
dentists, doctors, engineers, interior decorators and lawyers,
otherwise than as an employee.

So can you confirm that above mentioned income comes under U/S 153(b) or U/S 153(c) ?

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by LapTop
 Ap jis organization k permanent employee han wahan say to ap ki income hay wo salary income hay or us par tax U/S 149 lagy ga,

Jis university say ap hourly basis par payment laity han, wo U/S 153( c) may aati hay, or us par 6% k hisab say hi income tax withheld hona chayea.

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LapTop · 03-02-2011, 06:41 PM

Imran Bhai,, zarori nahi hay k contract ya agreement written ho, kisi bhi contract ya agreement may 3 batonon ka hona zarori hay,,, Offer, acceptance or consideration, ap k mamly may saf zahir hay k offer bhi hay or acceptance bhi tab hi aap wahan pharha rahay ho or us k badly payment layrahay ho jo k consideration hay.

Dosri baat.. contarct koi bhi ho wo U/S153 may aata hay,
Agar contract of sale of goods hay to U/S153(a)
Agar contract of services hay to U/S 153(b)
Or agar koi contract in dono category may nahi aata to wo U/S 153(c ) may aata hay.

Imran Hafeez · 03-02-2011, 06:48 PM

Thanks brother for resolving my problem.

One last question. shall i show my income in Incoming Tax Return under services rendered or under contracts?

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by LapTop
 Imran Bhai,, zarori nahi hay k contract ya agreement written ho, kisi bhi contract ya agreement may 3 batonon ka hona zarori hay,,, Offer, acceptance or consideration, ap k mamly may saf zahir hay k offer bhi hay or acceptance bhi tab hi aap wahan pharha rahay ho or us k badly payment layrahay ho jo k consideration hay.

Dosri baat.. contarct koi bhi ho wo U/S153 may aata hay,
Agar contract of sale of goods hay to U/S153(a)
Agar contract of services hay to U/S 153(b)
Or agar koi contract in dono category may nahi aata to wo U/S 153(c ) may aata hay.

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LapTop · 03-02-2011, 06:54 PM

agar ap apni income ko services U/S 153(B) declare karyn gay to ap ko is ki minimum tax ki calculation karni pary gi.

Is liye mera mashwara hay k ap apni income ko U/S 153( c) Contract declare karyn. Jo k FTR may hay.

Imran Hafeez · 03-02-2011, 07:35 PM

What is minimum tax? How can i do calculation for minimum tax? Just want to understand this concept of minimum tax from the perspective of a salaried person

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by LapTop
 agar ap apni income ko services U/S 153(B) declare karyn gay to ap ko is ki minimum tax ki calculation karni pary gi.

Is liye mera mashwara hay k ap apni income ko U/S 153( c) Contract declare karyn. Jo k FTR may hay.

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LapTop · 03-02-2011, 07:39 PM

Salary income say minimum tax ka koi taluk nahi hay,,
Jo income services ki hoti hay or U/S153(b) may aati hay us k liye minimum tax calculation hoti hay.

Imran Hafeez · 03-02-2011, 07:45 PM

Lets suppose I earn 200,000 from rendering teaching services and pay 6% with holding tax on it.

Apart from that i have no other income from services.

How will i calculate my minimum tax?

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by LapTop
 Salary income say minimum tax ka koi taluk nahi hay,,
Jo income services ki hoti hay or U/S153(b) may aati hay us k liye minimum tax calculation hoti hay.

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LapTop · 03-02-2011, 07:51 PM

Agar ap ki services ki income 200,000/- hay or us par 6% k hisab say tax withheld howa hay 12000/-

Minimum calculation aysy ho gi k ap sab say pahly net income nikaly gay apny expense less kar k,
Missal k tor par ap nay apni net income 150,000/- nikali, ab is par normal tax rate laga k tax nikalyn gay, 150,000/- chunky exempt income hay is liye tax 0 nikly ga,
Ab chunky ap ka tax normal tax rate k mutabik kam hay U/S 153(b) 12000, is tarhan ap ki minimum tax liability 12000/- hi rahay gi.

LapTop · 03-02-2011, 07:54 PM

Read Clause 34 , circular 03 of 2009.

Imran Hafeez · 03-02-2011, 08:04 PM

Great. If earn 1,000,000 annually from my permanent job salary, will i add my service income with salary income?

Secondly, if my services net income from teaching is Rs 550,000 and normal tax is Rs 24'750 @ 4.5% normal tax and U/S 153(b) tax is Rs 33,000 @ 6.0%, so will my minimum tax will be Rs 33,000 or Rs 24,750?

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by LapTop
 Agar ap ki services ki income 200,000/- hay or us par 6% k hisab say tax withheld howa hay 12000/-

Minimum calculation aysy ho gi k ap sab say pahly net income nikaly gay apny expense less kar k,
Missal k tor par ap nay apni net income 150,000/- nikali, ab is par normal tax rate laga k tax nikalyn gay, 150,000/- chunky exempt income hay is liye tax 0 nikly ga,
Ab chunky ap ka tax normal tax rate k mutabik kam hay U/S 153(b) 12000, is tarhan ap ki minimum tax liability 12000/- hi rahay gi.

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LapTop · 03-02-2011, 08:10 PM

Separate Block of income separate block of tax, salary income may add nahi kar sakty services ki income.

33,000/- ho gi ap ki minimum tax liability.

Imran Hafeez · 03-03-2011, 05:01 PM

I have decided to calculate tax on visiting faculty income using u/s 153b.

While filing the income tax return, where will i show my visiting faculty income.

If i show it in my Total income, excel automatically adds it in my taxable income and changes my tax slab, which is wrong.

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by LapTop
 Separate Block of income separate block of tax, salary income may add nahi kar sakty services ki income.

33,000/- ho gi ap ki minimum tax liability.

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