PAYMENT OF TAX

After discussing in detail the legal provisions regarding the furnishing of return of income and the procedure for different types of assessment, now we proceed to another step which is the payment of tax. One must understand and keep in mind here that the sequence in which these steps have been discussed here is not followed practically. Rather, in many cases, the tax is paid along wth or before the return. The three modes of payment being discussed here are also known as the payment of tax before assessment. These modes of payment have been discussed in Divisions I, II, and III of Part V of Chapter X and in Chapter XII of the Income Tax Ordinance, 2001.

Deduction of Tax at Source

It is necessary for certain persons to deduct or recover the amount of tax at specific stages out of amounts due to taxpayers and deposit this amount with the tax authorities. Cases where deduction of tax at source is necessary are discussed below in detail.(a) Salary

It is necessary for every employer, whether in public or private sector, that while any payment in respect of salary (provided that salary is taxable) income tax must be deducted. Dfa Ho The total tax payable on the estimated salary of the person taking into consideration any tax withheld or any tax credit due for the tax year is calculated. On the basis of this amount tax is deducted and deposited with the Commissioner every month.