THE government has cut income tax rates for salary, individual, AOP and other categories in the tax year 2018-19. However, there are some categories where neither tax rates have been reduced nor have they been brought in line with tax slabs of the above categories.

In the case of AOP, the tax on taxable income of Rs1,200,000 is Rs2,000 only. As against this, tax of Rs90,000 will be chargeable on the same amount of taxable property rental income of Rs1,200,000. Why is there such an anomaly with tax filers in the latter category for the same amount of taxable income?

I discussed it with a Federal Bureau of Revenue (FBR) employee, who said that they “are different slab rates for different categories; so is in the case of property rental income. The FBR may have different categories for their tax working/accounting purpose. To be fair, the income is income and tax is payable on the income, and not on the category. So, whichever category it falls, the tax slab should be the same as of AOP for all categories.

Will the Federation of Pakistan Chamber of Commerce and Industries (FPCCI) take up the matter with the FBR to revise the tax slab on property rental income in line with AOP so that filers in this category also stand relieved of heavy tax burden by getting benefit of recent adjustments in tax rates?

Munawar A. Arbab
Karachi

Published in Dawn, December 25th, 2018