Income tax is that type of tax that is conducting on a person income, that is generated by his/her business or we may say that a tax levied on the financial income of persons, corporations or other legal entities. A person pays tax on total profit that is getting by his business. OR
Taxation according to a person’s ability to pay is universally accepted principle, and income is considered a satisfactory though not a sufficient index of such ability to pay. Income Tax is, therefore, generally recognized as a highly equitable form of taxation. A tax levied on income can normally be shifted to others and thus its incidence is on those for whom it is intended. Since income tax is progressive in nature, it tends to reduce economic disparity. Tax rates and method of calculating taxable income varies with fiscal status of the tax payer. Following are the broad categories of taxpayers:-
Association of Persons (AOP)
Non Salaried Individuals
Capital Value Tax
It is payable by individuals, firms and companies which acquire an asset by purchase or a right to use for more than 20 years.
Corporate Asset Tax
It is levied through section 12 of the Finance Act, 1991. This is one time levy payable by a company as defined in Companies Ordinance, 1984, on the value of fixed assets held by the company on the "specified date