CUSTOMS - BUDGET FY 2019-20
RELIEF MEASURES
1. To standardize printing and preservation of Holy Quran, import of good quality duty free Art paper is being allowed.
2. Exemption of CD on 18 medicinal inputs/items
3. Exemption of CD on Modular/ Particle Free Operation Theatre
4. Exemption of CD on Medicines for certain rare diseases
5. Incentive to promote tourism by reducing duty on pre-fabricated structures for hotels
INCENTIVIZING LOCAL INDUSTRY:
1. Exemption of CD on more than 1650 raw materials/industrial inputs
2. Reduction of CD on Writing & Printing Papers
3. Exemption of CD on Raw- materials of Paper Industry
4. Exemption of CD on import of Wood
5. Reduction of CD on Glass Board for LED Panel manufacturing
6. Reduction of CD on input goods for paper based Liquid Food Packaging Industry
7. Reduction of CD on Acetic Acid
8. Reduction of CD on Nonwoven fabrics
9. Exemption of CD on Machinery Parts / Accessories for Textile Sector
10. Exemption of CD on Elastomeric Yarn
11. Rationalization of CD on Aluminium Beverage Cans & Inputs thereof
12. Exemption of CD on raw material for hemodialyzers used by kidney patients
13. Tariff rationalization on Home Appliance Sector
14. Reduction of CD on Base Oil as input for Coning Oil, White Oil and other Textile Oils
15. Reduction of CD on Raw Material for Manufacturing of Pre-Sensitized Printing Plates
16. Exemption of CD on Preparations for Metal Surfaces as input for Solar Panels
17. Exemption of CD on Foundation Cloth
18. Reduction of Duty on Wooden Sheets for Veneering
19. Reduction of CD on Oxalic Acid
20. Reduction of CD on Raw Material of Powder Coating Industry
21. Reduction of CD on Raw Material for Paper Sizing Agents
22. Reduction of CD on Bobbins & Spools of Paperboard
23. Exemption of CD for Hydrocracker Industry for oil refining
24. Rationalization of tariff structure for SIM card manufacturing industry
REGULATORY DUTY:
1. Reduction of RD on Mobile Phones
2. Reduction of RD on smuggling prone items and other industrial inputs
3. Reduction of RD on Tyres
REVENUE MEASURES:
1. Increase in rate of Additional Customs Duty for non-essential items
2. Withdrawal of exemption on import of LNG
SALES TAX & FEDERAL EXCISE BUDGETARY MEASURES (FY 2019-20)
The budgetary measures pertaining to Sales Tax & Federal Excise are primarily aimed at:
RELIEF MEASURES
01. Expansion in scope of exemption allowed in respect of Tribal Areas
To settle the post FATA/PATA merger scenario and to extend tax exemptionsSRO 1212(I)/2018is being rescinded and exemptions are being incorporated in it in the Sixth Schedule to the Sales Tax Act, 1990. Further, exemption from sales tax on imports of plant, machinery, equipment for installation in tribal areas, and of industrial inputs by the industries located in the tribal areas, is also proposed.. Additionally, supplies of electricity to all residential and commercial consumers, and to industries which were set up and started their industrial production before 31st May, 2018, but excluding steel and ghee / cooking oil industries.
2. Withdrawal of 3% Value Addition Tax on Petroleum Products and Mobile Phones
3% value addition sales tax is payable on all commercial imports. One of the exclusions from this levy is available to those petroleum products imported by oil marketing companies, whose prices are regulated. This exclusion does not cover furnace oil, which is being proposed now.
Secondly, it is proposed to exclude mobile cellular phones and satellite phones from purview of 3% value addition. This 3% regime is also proposed to be transferred from the Sales Tax Special Procedures Rules, 2007, to the new Twelfth Schedule to the Act.
03. FIXED SALES TAX ON BRICK KILNS
Brick kiln are proposed to be taxed at fixed rate as under
-- Category A Rs 12,500 pm
-- Category B Rs 10,000 pm
-- Category C Rs 7,500 pm
4. REDUCED RATE OF SALES TAX ON FOOD SUPPLIED BY RESTAURANTS, BAKERIES, CATERERS ETC
In view of the undocumented nature of this sector and very low input tax for adjustment because of exempt food related inputs such as meat, vegetables, flour etc, there is disincentive to pay sales tax at 17%. In order to encourage compliance, it is proposed to reduce the sales tax rate from 17% to 7.5% against which input tax adjustment will not be allowed.
5. REDUCTION OF RATE OF SALES TAX ON CONCENTRATED MILK (POWDER)
Presently, the sales tax regime on various forms of milk is uneven. Milk and cream, concentrated, and unsweetened / unflavoured is subject to a higher rate. While the sweetened on enjoying exemption. It is proposed to rationalize the same. Both the categories are proposed to be taxed @10%
6. REMOVAL OF BAR ON EXPORT OF PMC AND PVC TO AFGHANISTAN
It is proposed that the SRO 190(I)/2002 may be amended to delete entries relating to PVC and PMC materials, and thus allowing zero-rating on export of these items to Afghanistan and Central Asian Republics.
7. WITHDRAWAL OF EXEMPTION OF FED ON INTERNET SERVICES AND FOREIGN SATELLITE BANDWIDTH SERVICE
Telecom services provided in Islamabad Capital Territory are subject to FED under the Federal Excise Act, 2005. However, internet services are presently exempt from payment of FED under Third Schedule to the Federal Excise Act, 2005
Similarly, bandwidth services are also exempted from payment of FED. In order to protect local services providers, it is proposed to withdraw exemption on services provided by foreign satellites and maintain exemption only on terrestrial bandwidth services.
8. REFORMING EXTRA TAX REGIME
Extra tax regime is being done away with and items like electric and gas appliances, foam, confectionary, lubricants( in retail packing), batteries, tyres / tubes etc are being moved to Third Schedule (retail price taxation) of the Sales Tax Act, 1990, to realize full revenue potential thereon.
9. ALLOWING ZERO-RATING ON SUPPLY OF TOBACCO TO EXPORTERS.
In order to facilitate the exporters of unmanufactured tobacco, it is proposed that the FED shall be charged at zero per cent on unmanufactured tobacco as supplied to a registered person / trader who intends to export the same subject to furnishing of necessary security.
10. EXCLUSION OF GOVERNMENT BODIES FROM PURVIEW OF EXTRA TAX AND FURTHER TAX
Further tax at 3% is chargeable on all supplies made to unregistered persons under section 3 (1A) of the Sales Tax Act, 1990. Similarly, under SRO 509(I)/2013 dated 12.06.2013, 5% extra tax is chargeable on electricity and gas bills from all unregistered industrial and commercial consumers whose monthly bill exceeds Rs 15,000. Since, such bodes are not the target of these taxes, it is proposed that Government / semi-government and statutory regulatory authorities may be excluded from purview of both these taxes.
REVENUE MEASURES
11. STREAMLINING SRO 1125(I)/2011 REGIME
SRO 1125(I)/2011 provides for zero-rate of sales tax on inputs and products of five export-oriented sectors i.e. textile, leather, carpets, sports goods and surgical goods. The objective was to resolve delay in refund payments. However, zero- rating has created loophole and the benefit is being availed by unintended beneficiaries / non-exporters. Reduced rates for finished goods is also harming revenues. Huge misuse of SRO on import of fabric and processed fabrics has been reported. To streamline and prevent revenue leakage SRO 1125 is being rescinded.
-- SRO 1125 be rescinded, thus restoring standard rate of 17% on items covered under SRO.
-- The rate of sales tax on local supplies of finished articles of textile and leather and finished fabric may be raised from current 6% for integrated businesses, and 9% for others, to 15% and 17%, respectively.
-- Zero-rating of utilities (gas, electricity and fuels) allowed to these export- oriented sectors through various sales tax general orders be withdrawn.
-- Refund of sales tax to these sectors be automated, thus ensuring that the sales tax paid on inputs is immediately refunded. Refund Payment Orders (RPOs) shall be immediately sent to SBP for payment as soon as these are generated.
-- Ginned cotton which is presently exempt is proposed to be subjected to reduced rate of 10%
In addition to above, it is also proposed to rescind notification No. SRO. 769 (I)/2009, dated 4th September, 2009, which grants zero-rating on import and supply of polyethylene and polypropylene for manufacture of mono filament yarn and net cloth, being similar in nature to SRO 1125, and that granting zero-rating to local supplies is to be discouraged.
12. INCREASE IN FED ON AERATED WATERS
In order to generate much need revenue, rate of FED on aerated waters is proposed to be increased from 11.5% to 14%.
13. RESTORATION OF NORMAL REGIME FOR STEEL SECTOR
Special Regime of taxation of the whole of the steel sector is being abolished Sales tax on billets, ingots, bars, ship plates and other long profiles may be exempted at manufacturing and import stage, and in lieu thereof FED at 17% in sales tax mode may be imposed for the reason that there is no exemption of FED for tribal areas.
14. RESTORATION OF NORMAL PROCEDURE FOR / INCREASE IN FED ON GHEE/COOKING OIL
In order to do restore normal regime, in addition to measures included in the Finance Bill, the following notifications providing for Rs 1/ kg and Rs 0.40 per kg rates are proposed to be rescinded
Accordingly, it is proposed to increase rate of FED to 17% on edible oils / ghee / cooking oil
15. INCREASE IN FIXED VALUE OF GAS SUPPLIED TO CNG DEALERS
Since then CNG prices have been de-regulated and CNG prices have risen. Further gas tariff has also been raised. In order to realize due sales tax from this sector, it is proposed to re-notify the value for sales tax on supply from gas distribution company to CNG dealers
16. INCREASE IN FED ON CIGARETTES
FED on cigarettes is levied on fixed rate basis. It is proposed to enhance the rates and redefine the thresholds by abolishing the third tier introduced earlier
17. CHANGE IN THE RETAILERS REGIME
To rationalize tax on retailers and to capture its full potential and document its sales, following proposals are made:-
(i) Turnover tax option may be withdrawn.
(ii) For tier-1 retailer, it may be made mandatory to integrate their points of sales (POSs) with FBR's Computerized System so that the sales are reported in real time.
(iii) Retail shops having an area in excess of 1000 square feet may be included in Tier-1
(iv) In order to encourage customers to demand invoices from retailers, enabling provisions are proposed to be inserted in section 3 whereby FBR may allow cash back of up to 5% of the sales tax charged on invoices to the customers.
18. INCREASE IN RATE OF TAX ON SUGAR
Presently Sugar is subject to sales tax at 8%. In order to generate much need revenue, it is proposed that the sales tax rate on sugar may be enhanced to 17%.
19. REVIEW OF EXEMPTIONS UNDER SIXTH SCHEDULE
More items are being taken out of the Sixth Schedule and brought into the tax net if sold in retail packing and with a brand name like Frozen Sausages, meat if preserved, fat filled milk and cereals other than those of wheat and meslin
20. ADDITION OF GOODS TO THIRD SCHEDULE OF THE SALES TAX ACT, 1990.
After withdrawal of the extra tax regime, the finished articles like Foams and mattresses,Paints &varnishes ,Electric and gas home appliances, Lubricating oils and Storage batteries will be placed in the Third Schedule
21. EXEMPTION OF COTTAGE INDUSTRY
Cottage industry is being redefined to include
(a) does note have an industrial gas or electricity connection;
(b) is located in a residential area;
(c) does not have a total labour force of more than ten workers; and
(d) annual turnover from all supplies does not exceed two million rupees
22. FED ON PACKAGED NON-AERATED SUGARY / FLAVOURED JUICES, SYRUPS & SQUASHES
In order to generate revenue and also to provide level playing field for aerated water which are proposed to be subjected to higher FED at 14%, is proposed that the non-aerated packaged sugary drinks, such as juices, syrups and squashes may be subjected to FED at 5% of retail price.
24. INCREASE IN FEDERAL EXCISE DUTY ON CEMENT
Cement is chargeable to federal excise duty @ 1.5 per kg. It is now proposed to increase federal excise duty on cement to Rs 2 per kg.
25. INCREASE IN RATE OF FED ON LNG
Presently, FED is payable at Rs 17.18 per 100 cubic meters. The rate is substantially lower and generates only Rs 2 to 3 million annually. Accordingly, it is proposed to to increase FED on LNG from Rs 17.18 per 100 cu. m to Rs 10 per MMBTU bringing it to same level as for local gas
26. INSERTION OF GOLD, SILVER, DIAMOND AND JEWELLERY IN EIGHTH SCHEDULE TO THE SALES TAX ACT, 1990 AT REDUCED RATE
It is proposed to introduce reduced rate/minimal tax rate of 1% on gold and silver. Similarly, presently, jewellery is taxed on the basis of making charges only. Based on regional models, it is proposed that gold in jewellery may be taxed at 1.5%, diamond at 0.5% and making charges at 3%, with input adjustment available only in respect of gold.
27. INCREASE IN SCOPE OF FED ON CARS
Through Finance Supplementary (Second Amendment) Act, 2019, FED on locally manufactured / assembled cars of 1700 cc and above was introduced @10%. Now, in order to rationalize this levy, it is proposed to enlarge the scope of FED and following slabs are being proposed:
-- Cars from 0 to 1000cc 2.5%
-- Cars from 1001cc to 2000cc 5%
-- Cars from 2001 cc and above 7.5 %
28. THE SCOPE OF ICT SALES TAX ON SERVICES TO BE EXPANDED
It is proposed that services which have been subjected to sales tax by the provinces and are not included in the Schedule to ICT (Tax on Services) Ordinance, 2001, may be included in the Schedule and subjected to sales tax at standard rate of 16% under the said Ordinance. For clarity, it is mentioned that the services which are already being taxed under the Federal Excise Act, 2005, are not included in the services to be added to ICT law.
29. SPECIAL PROCEDURE FOR MARBLE INDUSTRY
Presently, sales tax is payable by marble industry under special procedure whereby sales tax is charged at Rs 1.25 per unit of electricity consumed. In view of low yield of this tax, it is proposed that special procedure may be done away with and standard regime of 17% be restored.
STREAMLINING MEASURES
30. SIMPLIFICATION OF LAW AND REDUCTION IN NUMBER OF RULES / INSTRUMENTS DEALING WITH SALES TAX
Presently sales tax law comprises of multi-tiered legislation and sub-ordinate legislation which makes it difficult for taxpayers to comprehend and follow law and also for the sales tax collectors to implement the same. Hence, all the special procedures and redundant SROs are being abolished.
31. TRANSPOSITION OF SROS TO THE SALES TAX ACT, 1990.
In order to minimize SRO regime, some of the existing SROs are proposed to be transposed to the Sales Tax Act, 1990. These SROs, which are consequently proposed to be rescinded.
32. RESCISSION OF SROS ISSUED BY FEDERAL GOVERNMENT.
In view of various proposals presented in this summary, some existing notifications will become redundant, it is proposed to rescind these notifications
27. SIMPLIFICATION OF SALES TAX REGISTRATION - EASE OF DOING BUSINESS
It is proposed to issue sales tax registration, through an automated interface without any physical contact with the tax officers. Biometric verification shall be done within a month of registration through NADRA e-Sahulat centres.
33. DECREASING THE LEGISLATIVE BURDEN OF FEDERAL GOVERNMENT / CABINET
Cabinet Division has directed to propose amendments in the relevant statutes and Rules to replace the words "Federal Government" wherever possible. Accordingly, both ST & FED laws have been scrutinized. Substantive powers may remain with the Federal Government, whereas procedural powers are proposed to be assigned to the Board.
34. LIMITING SCOPE OF FEDERAL GOVERNMENT'S POWER TO GRANT EXEMPTIONS AND ZERO-RATING
It is also proposed to similarly restrict the powers of the Federal Government to grant zero-rating under section 4, which presently has no such restrictions attached. It is also proposed to omit provisions in section 4, which empower FBR to grant zero-rating on goods purchased by a person making reduced rate supplies.
35. CHANGE IN PROVISIONS RELATING TO WITHHOLDING
It is proposed to amend sub-section (7) of section 3, to provide that the rate or extent of withholding / deducting tax by the buyer be specified in the Tenth Schedule to the Act and the power to make rules be given to the Board.
36. SECTION 58 OF STA 1990 - ENABLING DIRECTORS ETC TO RECOVER
PAID DUES
It is proposed to incorporate provisions enabling directors / partners to recover the paid amount from company, on the same pattern as already provided in Income Tax Ordinance, 2001.
INCOME TAX
Relief Measures
-- Payment of refunds through promissory notes:
Huge amounts claimed by taxpayers are stuck up in refunds causing a liquidity crunch for businesses. These refunds have accumulated over a long time. However, issuance of a substantial amount of refund would drastically reduce the net collection of taxes. In view of this a provision has been introduced wherein promissory notes would be issued to claimants at their option by a newly formed company called the FBR Refund Settlement Company Limited. The bonds are to have a maturity period of three years after which the company shall return the promissory note to the Board and the Board shall make payment of amount due under bonds along with profit due to the bond holders.
-- Rationalization of punitive measures for late filers:
Presently law prohibits placing a person's name on the active taxpayers' list for the year if the return is not filed within the due date. Hence, a person who files a return of income after the due date would be subjected to higher tax rates meant for persons not appearing on ATL, for the ensuing year, creating a disincentive towards return filing. The condition of not placing name on ATL for the whole year is being abolished. Instead, such a person would be penalized by withholding any refund due to a late-filer in the tax year in which the return was filed late without incurring any liability of compensation for delayed refund. Further, a nominal tax for placement on ATL after the due date of filing of return has been imposed as under:-
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S. NoPerson Tax rate
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1. Company Rs 20,000
2. Association of persons Rs 10,000
3. Non-salaried individuals Rs 3,000
4. Salaried individuals Rs 1,000
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-- Tax credit for persons employing fresh graduates:
In order to create opportunities of employment for fresh graduates a new tax credit for persons employing freshly qualified graduates is being introduced. Persons employing fresh qualified graduates, having graduated after 1st July 2017, from universities or institutions recognized by the Higher Education Commission would be given a tax credit equal to the amount of annual salary paid to such graduates. The tax credit shall be deducted from the tax payable by such persons and would be in addition to the expenditure claimed by businesses on payment of salary to their employees. In case the tax credit cannot be fully allowed for a tax year, persons claiming such credit would be allowed to carry forward un-adjusted credit to a maximum period of five years. However, the credit will be allowed against salary of those fresh graduates which are not more than 15% of the total employees
-- Exemption for allowances of Armed Forces Personnel:
Various allowances being given to Armed Forces Personnel i.e. internal security allowance and compensation in lieu of bearer allowance are being exempted from tax
Revenue Measures
-- Gift to be treated as income:
At present gift is not taxed in the hands of the recipient. Receipt of gift is employed to reconcile wealth acquired through undisclosed sources of income. Therefore receipt of gift has been brought within the ambit of income under the head "income from other sources". Consequently any amount in cash or fair market value of any property including immovable property would be treated as gift. However, certain exclusions are also proposed to facilitate genuine gift transactions which are not meant to evade income tax.
-- Enhancing the rate of minimum turnover tax:
Presently minimum tax on turnover is charged at the rate of 1.25% of the turnover if taxable income is less than 1.25% of turnover. Certain sectors have reduced rate of minimum tax at 0.2%, 0.25% & 0.5% of turnover. The aforesaid rates of minimum tax are being enhanced from 1.25% to 1.5%, from 0.20% to 0.25%, from 0.25% to 0.3% and from 0.5% to 0.75% respectively.
-- Abolishing tax credit for investment in BMR:
Presently a corporate industrial undertakings investing in purchase of plant & machinery for extension, expansion, balancing, modernizing & replacement are allowed tax credit equal to ten percent of the purchase price of machinery. This facility of tax credit was introduced through the Finance Act, 2010 with a sunset clause ending on 30th June 2015 which has been amended multiple times, resulting in extension of the facility up to tax year 2021.
The said tax credit is being allowed to those companies which purchase and install plant & machinery up to 30th June, 2019. Further, for the tax year 2019, the tax credit is being reduced from 10% to 5% of the purchase value of machinery. However industrial undertakings which have already claimed this tax credit but could not fully adjust the credit against tax payable would still be entitled to carry forward the unabsorbed available credit of prior years.
-- Special provisions for persons not appearing on Active Taxpayer's List:
Presently the law provides for the concept of a non-filer and stipulates higher withholding rates for the same which are adjustable at the time of filing of income tax return.
This tax regime has created a misconception that a non-filer can go scot free by choosing not to file income tax return. The measure was meant to increase the number of filers, however over time the focus shifted to raising additional revenue only. The measure has not achieved the desired results as the present regime does not provide for any legal framework to ensure filing of return by such non filers.
In order to remove the aforesaid misconception, the concept and the term of "non-filer" is being abolished from the statute, wherever occurring. In its stead a separate Schedule is being introduced to specifically provide a legal framework for punitive measures for persons not appearing on ATL and to ensure filing of return by such persons. The main attributes of this scheme are as under:-
-- Persons whose names are not appearing on the ATL will be subjected to hundred percent increased rate of tax.
-- The withholding agents will clearly specify the names, CNIC or any other identification of such persons in the withholding statement so that legal provisions to enforce return can come into effect.
-- Where a withholding agent is of the opinion that hundred percent increased tax is not required to be collected on the basis that the person was not required to file return, the withholding agent shall furnish an intimation to the Commissioner setting out the basis on which the person is not required to file return. The Commissioner shall accept or reject the contention on the basis of existing law. In case the Commissioner fails to respond within thirty days, permission shall be deemed to be granted to not deduct tax at hundred percent increased rate.
-- Where the person's tax has been deducted or collected at hundred percent increased rate and the person fails to file return of income for the year for which tax was deducted, the Commissioner shall make a provisional assessment within sixty days of the due date for filing of return by imputing income so that tax on imputed income is equal to the hundred percent increased tax deducted or collected from such person and the imputed income shall be treated as concealed income.
-- The provisional assessment shall be of no effect if the person files return within forty five days of completion of provisional assessment and the provisions of the Ordinance shall apply accordingly. Where return is not filed within forty five days of provisional assessment, it shall be treated as final assessment and the Commissioner shall initiate penalty proceedings for concealment of income.
-- Additional slabs of income from property:
At present there are five taxable slabs of income from property with the highest slab's rate being Rs 200,000/- plus 20% of income exceeding Rs 2000,000.
Now the said slab is being limited from Rs 2000,000/- to 4,000,000/- and thereafter three additional brackets of income between four to six million, six to eight million and exceeding eight million are being added
-- Increase in tax rates for services:
At present, the general rate of tax on services is eight percent but certain services have a reduced rate of 2% of turnover as given in clause (94) of Part IV of Second Schedule. The aforesaid clause (94) is being omitted and the tax rate for services therein having reduced rate of 2% of turnover, is being increased to 4% of the gross amount of turnover. Further the present rate of 2% for transport services is also being increased to 4%.
-- Withholding tax on royalty to a resident person:
At present withholding tax is deducted on any payment of royalty to a nonresident person. However, there is no such withholding tax in case of payment of royalty to a resident person. Therefore a withholding tax at the rate of 15% of the gross amount of royalty to be deducted from resident persons is being introduced.
-- Revising the threshold of taxable income:
Prior to Finance Act 2018, the threshold of taxable income for both salaried and non-salaried persons was Rs 400,000. Through the Finance Act, 2018, the threshold was increased to Rs 1,200,000. The threshold of taxable income is generally a proportion of the per capita income of a country. Such significant increase is unprecedented and distortionary, resulting in revenue loss also. Therefore it has been proposed that the threshold of taxable income may be revised and fixed at Rs 600,000 for salaried persons and Rs 400,000 for nonsalaried persons.
-- Increase in tax rates for Salaried and Non Salaried persons:
Presently the tax rates for salaried persons are applicable to persons having 50% or more of their total income from salary. Now these tax rates for salaried persons are to be applicable to persons having 75% or more of their total income from salary. Consequently for persons having salary income less than 75% of total income, the rates applicable to non-salaried individuals would apply. In the case of salaried individuals deriving income exceeding Rs 600,000, eleven taxable slabs with progressive tax rates ranging from 5% to 35% are being introduced as under:-
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S. NoTaxable Income Rate of Tax
====================================================================
1. Where taxable income does not
exceed Rs 600,000 0%
2. Where taxable income exceeds 5% of the amount
Rs 600,000 but does not exceed exceeding Rs 600,000
Rs 1,200,000
3. Where taxable income exceeds Rs 30,000 plus 10%
Rs 1,200,000 but does not exceed of the amount exceeding
Rs 1,800,000 Rs 1,200,000
4. Where taxable income exceeds Rs 90,000 plus
Rs 1,800,000 but does not 15% of the amount
exceed Rs 2,500,000 exceeding Rs 1,800,000
5. Where taxable income exceeds Rs 195,000 plus 17.5%
Rs 2,500,000 but does not of the amount exceeding
exceed Rs 3,500,000 Rs 2,500,000
6. Where taxable income exceeds Rs 370,000 plus 20%
Rs 3,500,000 but does not of the amount exceeding
exceed Rs 5,000,000 Rs 3,500,000
7. Where taxable income exceeds Rs 670,000 plus 22.5%
Rs 5,000,000 but does not of the amount exceeding
exceed Rs 8,000,000 Rs 5,000,000
8. Where taxable income exceeds Rs 1,345,000 plus 25%
Rs 8,000,000 but does not of the amount exceeding
exceed Rs 12,000,000 Rs 8,000,000
9. Where taxable income exceeds Rs 2,345,000 plus 27.5%
Rs 12,000,000 but does not of the amount exceeding
exceed Rs 30,000,000 Rs 12,000,000
10. Where taxable income exceeds Rs 7,295,000 plus 30%
Rs 30,000,000 but does not of the amount exceeding
exceed Rs 50,000,000 Rs 30,000,000
11. Where taxable income exceeds Rs 13,295,000 plus 32.5%
Rs 50,000,000 but does not of the amount exceeding
exceed Rs 75,000,000 Rs 50,000,000
12. Where taxable income exceeds Rs 21,420,000 plus 35%
Rs 75,000,000 of the amount exceeding
Rs 75,000,000";
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For non-salaried persons deriving income exceeding Rs 400,000, eight taxable slabs of income with tax rates ranging from 5% to 35% are being introduced in the following manner:-
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S. NoTaxable Income Rate of Tax
====================================================================
1. Where taxable income does not exceed
Rs 400,000 0%
2. Where taxable income exceeds 5% of the amount exceeding
Rs 400,000 but does not exceed Rs 600,000
Rs 600,000
3. Where taxable income exceeds Rs 10,000 plus 10%
Rs 600,000 but does not of the amount exceeding
exceed Rs 1,200,000 Rs 600,000
4. Where taxable income exceeds Rs 70,000 plus 15%
Rs 1,200,000 but does not of the amount exceeding
exceed Rs 2,400,000 Rs 1,200,000
5. Where taxable income exceeds Rs 250,000 plus 20%
Rs 2,400,000 but does not of amount exceeding
exceed Rs 3,000,000 2,400,000
Where taxable income exceeds Rs 370,000 plus 25%
Rs 3,000,000 but does not of the amount exceeding
exceed Rs 4,000,000 Rs 3,000,000
5. Where taxable income exceeds Rs 620,000 plus 30%
Rs 4,000,000 but does not of the amount
exceed Rs 6,000,000 exceeding Rs 4,000,000
6. Where taxable income exceeds Rs 1,220,000 plus 35%
Rs 6,000,000 of the amount exceeding
Rs 6,000,000
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