Hi All, I’ve received an instalment payment reminder from Eighteen and they have included Advance Tax on top of the usual instalment amount. Can anyone let me know what is this Advance Tax for? How does it work. I didn’t know about this before so have absolutely no idea. Can some of the learned members shed some light on the mechanics of this advance tax. Thanks
Arshad sb
If you are a filer then there is 1% tax on immovable property otherwise 2% tax will be deducted on property transaction.
But you can always mention in your tax returns if your expenses can qualify in FBR for deduction.
In tax returns house hold supplies are not deductibles but if you register a company with FBR, you can always submit your car petrol expenses & all other company related expenses which will give you relax in tax returns.
In case of company, if you pay to employees less than 20K salary then no need to show proof to FBR…just mention in tax returns but if more then you have to transfer employees salary to their bank accounts.
My suggestion, become a filer and hire a tax lawyer.
I can connect you to mine one who is very bright and very economical in fee as well. He will take all your headache. Fee around 5,000 per annum may be depending upon your financial Porfirio…may be little more.
Thanks Yusuf Sb for your reply. But I’m an overseas Pakistani and aren’t overseas Pakistanis exempt from lodging tax returns. Also its a 4 years instalment plan I’m following with Eighteen so will there be any true up of this advance tax collected at the end of 4 years instalment plan. Also please share details of the tax accountant you mentioned.
Also I’ve bought a plot from DHA Islamabad on instalment basis and they have never asked for this advance tax - So DHA don’t charge this advance tax? I would have thought that this should be across the board
@arshadwazir FYI overseas Pakistanis are not exempted from filing tax returns. However if you don’t have income source in Pakistan, you can submit your returns online by choosing the category of overseas having no income. Just fill in basic info and submit. You don’t need to write any values.
Yes, if overseas Pakistani is having any source of taxable income in Pakistan then only he /she is liable to pay the tax.
adding further on what Saad sb mentioned, its strongly required for overseas Pakistanis to declare all the assets and incomes with sources to avoid questions when they back to the country, it can be enter directly in their website or as AQ sb advised hire a lawyer and they are expert doing it for you on small fee.
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Khan sb
If try to emphasize on declaring the total assets to the FBR, I can never finish writing the very importance of it…
I was extremely lucky to declare all of my assets per my tax lawyer’s advice & now enjoying my business growth without any fear of FBR drastic notices.
All money in my account is now green & I can do big transactions in my account for selling & buying.
However most expats have rental income in Pak to support the families back home & that’s where problems start for expats.
FBR tags this rental income as investment & tax it but if you do not declare, FBR will start taking right from the year of the 1st received rent & if you delayed showing for years, the tax will amounts to Lacs of Rs.
The best thing is just ask the lawyer to register yourself with FBR as a business concern…very simple step …name it like Khan & bros for example & that will greatly help you in rental tax returns because now you can show business expenses like car gas & whole lot to mak your tax like nothing…
Another very important thing is declare all gold & outside resources when you are on expat status & you will be amazed how better you be in Pak doing monetary things.
Expats actually show more than actually they have like in multi-millions as it does not hurt from tax point of view but helps great once you come back home & do investment.
My tax lawyer contacts:
Mr. Usman:
092336 5389841
092330 6760509
Ok thanks for clarifying - as I don’t have any income source in Pakistan so it will be a nil tax return.
Thanks Yusaf - much appreciated - I’ll contact this tax guy inshallah
fully Agreed, an expat is good to declare every everything even more, it will be useful on his return.
@arshadwazir i am an expat too and bought a plot in islamabad dha in overseas sector on lump sump. I received letter from DHA advising me to deposit the advance income tax before they can issue the allotment letter.
By the way, the letter did say thst since overseas sector is a special project for overseas Pakistanis, there will be no tax on it if you transferred the money from overseas. I transferred the money I had in Pakistan so I am suppose to pay the tax.
The rate was 2% for filer and 1% for non filer. I was obviously a non filer then but now I have become a filer since it saves me money to be a filer. The overseas income declared to FBR is not taxed as mentioned by many here. Hope this helps!
Ok thanks - but are u sure that if one is transferring money from overseas then there is no tax on it - I doubt it to be true
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Only for the recent overseas sector plots offered in the dha as it was given exemption by govt if paid through RDA.
But then shouldn’t this rule be applicable to every project where the money is been transferred from overseas through RDA regardless if the sector is for overseas or not
I am not sure. I think government gave special permissions for these sectors to encourage overseas to invest. You can contact dha office to clarify.
If one make remittances in $ account in Pak , then better to encash them within the return filing year…that’s what tax lawyers say…the case is in the SC & not decided yet…
If remittances in Rs, then no problem at all, you are helping the state.