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| 14 June 2004 | Monday | 25 Rabi-us-Saani 1425 |
Senior citizens to get tax relief
ISLAMABAD, June 13: The government has proposed to reduce withholding tax on items prone to smuggling, raise the rate of tax on lotteries and winnings to 20 per cent, exempt the sick industries from paying the income tax and extend the facilities for amalgamation of financial institutions for yet another year.
Through various income tax budgetary notifications for 2004-05 issued here on Sunday, the rate of withholding tax on the import of certain identified items prone to smuggling was reduced from six per cent to two per cent.
The existing law provides 50 per cent rebate in tax liability to those senior citizens (aged 65 and above) whose income does not exceed Rs200,000. It is now proposed to increase that limit to Rs300,000 to benefit these people.
The rate of withholding tax on lotteries and winnings other than prize bonds is proposed to be raised from 10 per cent to 20 per cent. In order to revive the sick industries, the mark-up and debt off under State Bank of Pakistan BPD circular 29 of 2002 is proposed to be exempted from operation of taxation provisions of the income tax ordinance.
Maintenance of a bank account required a minimum credit balance of Rs10,000, failing which a charge is levied on bi-annual basis. The existing provisions of payment of salary amounting to Rs5,000 or more through cross-cheque is too small.
It is proposed to raise the limit of salary payment through cheque to Rs10,000. The government has also raised the limit of expense payment under single account head through cheque from Rs5,000 to Rs10,000.
It is proposed that individuals and associations of persons engaged in trading business and having annual turnover of up to five million rupees might opt to pay 0.75 per cent of their declared turnover as presumptive income tax effective from tax year 2004.
To facilitate the taxpayers and remove the hurdles of voluntary compliance, it is proposed to raise the income limit for filing of wealth statement with the return of income to Rs500,000 for salaried and non-salaried taxpayers. It is also proposed to withdraw adjustment of capital value tax against any wealth tax liability.
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