RESIDENT PERSONS

A person shall be a resident person for a tax year if the person .

NON-RESIDENT PERSONS

Under the Income Tax Ordinance, 2001, a person shall be a non-resi- dent person for a tax year if the person is not a resident person for that year

Explanation

The conditions for becoming a resident individual, resident company and resident association of persons have been explained in detail in the preceding pages. One must not have any problem now in distinguishing whether any person is resident or non-resident during a tax year.

NON-RESIDENT TAXPAYERS

A non-resident taxpayer means a taxpayer who is a non-resident person

Reasons for Distinguishing Resident and Non-Resident Person There are two basic reasons due to which it is necessary to determine whether a person is a resident or non-resident during the tax year Incidence of Taxation

The income of a resident person is calculated by taking into account both the Pakistan-source income and the foreign-source income. The income of Dfa Ho non-resident person is computed by taking into account only those amounts which are Pakistan-source income.

2. Rates of Tax

There is a difference in rates of tax for residents and non-residents. This difference will be discussed in later chapters.