WHAT many things related to it. Importance of

WHATIS TAXATION?Tax or any payment which is bindingupon such person to pay towards them.

A source or a process by whichgovernment imposes charges or some duties in form of The purpose behind suchstep is to encourage the society by providing them facilities and differentsources..for example. The construction of roads for transportation, further topromote education for betterment of society and so on many things related toit. Importanceof tax:Basically tax is initiated for the betterment and tobuild up the development for all over the country. The basic importance tocreate a creative welfare the countryGovernment raise their revenues in term of  income tax, sales tax, custom duty, GST andland revenue taxes like property tax etc.They also regulate the economic stability by theproduction of useful products and discouraging the production of harmful productsHistory:Taxation law was imposed by the British governmentwhich was later on followed by the different countries like Pakistan and India.As a result of British rule.

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When Pakistan came in to existence on 14thaugust 1947. The government of  Pakistan adoptedthe 1860 act which is known as income tax act 1860 imposed by british regimeThe very first income tax act was imposed with helpof first financial minister James WilsonThe purpose was to collect the tax byIncome from land propertyIncome from profession and tradeIncome from securityDividendsIncome from salaries and pensionsExemptions:Income up to 200 Rs by general publicMilitary and police officers salary  up to   Rs 4980In agriculture field 2% income tax imposed ranging Rs200 to 4994% income above 499Impositionof income tax act,1922:The Pakistan government adopted the 1922 act ofincome tax.this act was imposed on all over Pakistan except few areas incountry.1958:An inquiry committee regarding taxation matters wasintroduced which was the first committee in history of Pakistan.the officialsand trade representatives were involved trade and commerce fieldRecommendations:after very deep analysis of tax system the officialsgive recommendations from time to time regarding tax system.Abolishmentof tax:a term super tax was introduced which purpose was toapply a certain tax on income on all persons of Pakistan .Later on it wasdismissed until rate slab was imposed in 1959.

Changein financial year:The financial year was dated from 1st Aprilto 31st march before 1960s but on 1960 is was amended from 1stJjulyto 30 June.Incometax committee:A committee was introduced by FBR in 1961,the basicpurpose was to regulate the laws and procedure according to given criteria in1922 act the several recommendations were made.selfassessment scheme:an officer was authorized to inquire the tax systemof  person or individual. A recommendationswas made to offer individuals to gain self assessment.

So a self assessment schemewas introduced in 1965. Promulgationof income tax ordinance,1979:due to a lot of amendments a flow was created regardingthe procedure of tax laws. So there was a need of fresh act. In 1979 a new actwas introduced with further recommendations but the basic concept was same asgiven in 1922 act.NTRC:National tax reform commission was made with the concernto improve the structure of law present .Members of parliament, bureaucrats andindustrialists were involved to introduce the tax reforms.Incometax ordinance,2001:in previous act of 1979 a lot of recommendationswere made which purports to give benefit the holders of black money. So that,they are able to change it in white money.

As there were also a lot of amendmentswere made so a new recommendation were given by NTRC. Whose purpose was toformulate the new procedure of taxation laws, which was promulgated on15.06.

2002 and was named as income tax ordinance 2001. Which was extend towhole Pakistan.Purpose:The purpose was to amend the law and consolidate itrelating to tax laws.

Incometax rules 2002:After the enactment of the act the rules wereintroduced regarding tax law. Rules are basically consisted of procedure. That howto regulate the concerned matter. There rules were introduced by FBR accordingto section 237 of income tax ordinance 2001. And was published on July 1st2002.Financeact 2009:As there is a need to update the law according tothe change of time.

Different methods are adopted by competent authorities likesros and circulars. Finance act is the main source to update the change fromtime to time and it is presented in the month of June every year.


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