If you operate a small company, you should hire an income tax lawyer who can assist you in submitting your yearly taxes and filing the proper returns. The subject of the tax law differs significantly from other legal specialties. Tax Law is far more difficult to comprehend than other laws. And it could be the reason why the majority of Pakistani lawyers choose not to practice tax law.
By examining both practitioners, you can distinguish between a Tax law and another law with ease. And how can you succeed if, after earning your legal degree, you wish to become an income tax lawyer in Pakistan? We will provide complete information to become a successful and professional Income Tax Lawyer.
What can I do after LLB to become an Income Tax Lawyer in Pakistan?
If you are a law graduate and want to become an Income Tax Lawyer in Pakistan you can follow these steps;
- You can increase your knowledge by reading different books related to Law
- You can attach with a well-reputed law firm of tax and join a good lawyer as an associate in the income Tax field.
- You can Boost your knowledge related to tax by reading different columns, judgments, monthly journals, and other amendments in Income Tax law.
- An Advocate can be a good Income Tax Lawyer if he has knowledge and grip on online income tax registration methods to generate NTN and file an income tax return.
- As an Income Tax Lawyer, you can permanently join a company or organization and can also move to Tax Field in Government Institution.
- You can do a diploma in Income Tax Law which is offered by different Universities.
- Due to Chartered Accountants’ dual role as income tax experts, there is strong competition in the sector of income taxes. However, a lawyer is able to represent a client both in and out of court.
- The Income Tax Act of 1922
- The Income Tax Ordinance (1979)
- The Income Tax Ordinance, 2001
- Amendments Income Tax Ordinance 2021
- IT rules 2002
Services by Income Tax Lawyer to Clients:
Services for FBR Audit:
Income Tax lawyers assist companies, people, and charitable organizations in the audit process.
issues with international tax legislation All issues affecting remittances, non-residential status, overseas income, and investments, as well as repartition, are handled by our attorneys.
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Income Tax Return:
Since 2013, all Pakistani citizens have been required to pay advance taxes for a variety of activities. Despite paying high taxes, they still do not profit from anything. By submitting your income tax returns, we at Hamza & Hamza Law Associates, skilled tax attorneys in Lahore, assist you in becoming a tax filer.
ValidLaws challenge and protest assessments made by the FBR that were made in error and seek to have them corrected or revoked before the appropriate authority.
Sale Tax Return:
As the top tax attorneys in Lahore, we Validlaws Lawyer Associates compile, file, and keep your records for future use.
Sale Tax on Service:
In addition to submitting tax returns, the team at Validlaws Lawyer associates has experience pursuing audit cases and assessments with the Punjab Revenue Authority (PRA).
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Tax-Exempt & Not-For-Profit Organizations:
Our lawyers are well aware of the tax issues that nonprofit organizations encounter. The best possible outcome for our customers’ underlying issue with a tax authority is our first priority.
In addition, we work hard to provide our customers with the information they need to make wise tax choices both now and in the future.
In other words, we aim to assist our customers to resolve their present tax issues while preventing future ones.
The only legal company that can be relied upon for matters connected to tax concerns is Valilaws Law Associates, the finest and most renowned tax attorney in Lahore. We quickly remedy the issue since we are dependable, effective, and efficient.
Purpose of Income Tax Law in Pakistan:
Each law has a purpose for which the legislature chooses to put it into effect. In a developing society, the main goal of income tax is to assess and collect income taxes, which are subsequently applied to similar goals.
Although the terms “income” and “person” have been defined precisely in the Ordinance, there is still an ongoing conflict about “income” regarding the determination of its quantum and the range of chargeability between the tax department and taxpayers.
Income tax law serves as an instrument of fiscal policy, i.e., by granting exemption to a particular income or class of income, person or class of persons, the intention is to promote a specific economy.
In addition to collecting personal income tax, income tax law is aimed at two other important roles: first, the redistribution of wealth through progressive taxation (the principle that the more you earn, the more you pay is at the core of direct tax legislation).
Taxation System in Pakistan:
Like the majority of taxation systems across the globe, federal taxes in Pakistan may be divided into two categories: direct taxes and indirect taxes. The following is a general explanation of how these taxes are administered:
Income tax is the main component of direct taxes. All income is divided into the following categories for tax calculation and total income computation purposes:
- Income from Business or Profession
- Interest on Securities
- Income from Property
- Capital Gains
- Income from Other Sources
For the Tax Year 2022, all individuals, unregistered businesses, organizations of people, etc., are subject to tax at rates ranging from 5% to 35%.
Tax on Companies:
For the Tax Year 2022 and thereafter, all public firms (other than banking organizations) formed in Pakistan will be taxed at the corporate rate of 29%. However, due to concessions and exclusions relating to industry, geography, exports, etc., the actual rate is likely to vary.
For the Tax Year 2022 and after, a banking firm will continue to be taxed at the rate of 35%.
Wealth Statements are required by law, and the declared income is based on the individual’s total assets and liabilities, as well as the assets and liabilities of their spouse, minor children, and other dependents. It also includes the assets the individual has transferred to any other individuals, as well as the total amount of money they have spent.
Every resident taxpayer who is a person and has a foreign income of at least $10,000 USD or foreign assets valued at at least $100,000 USD must provide a statement known as a foreign income and assets statement.
Inter Corporate Dividend Tax:
When a dividend paid by an independent power producer is a pass-through item under a power purchase agreement or implementation agreement and must be repaid by the Central Power Purchasing Agency (CPPA-G) or its predecessor or successor agency, the payout is subject to a 7.5% tax.
Tax on dividends received from mutual funds, real estate investment trusts, and other sources not included in Sections 1 and 3 is 15%.
Tax on the dividend at a rate of 25%, received from a corporation when there is no tax owed on income, business losses are carried forward, or tax credits are claimed.
Difference Between Direct and Indirect Tax:
While indirect taxes are those whose weight is always carried by the final consumers and not the seller or importer of the supply, direct taxes are those whose burden is incurred by the person on whom the tax is imposed (the entities on whom the tax is levied).
The separation between the two is established and protected by the law, and any transfer of responsibility from the buyer to the manufacturer or vice versa is regarded as illegal and protected by the law.
Problems with Income Tax Laws in Pakistan:
Pakistan has a complicated tax system with more than 70 different types of taxes that are handled by at least 37 different government organizations. The FBR estimates that in 2021 there were 7.1 million registered tax filers, of whom only 2.5 million were active filers.
From July to March of the current fiscal year 21-22, the FBR exceeded its collecting goal by RS 247 billion. It is a 29.1% rise over the Rs 3,394 billion in collections made during the same time the previous year. The gross receipts, on the other hand, also rose by 28.9%.
Salary of Income Tax Lawyer in Pakistan:
In Pakistan, there are several variables that affect an income tax lawyer’s pay. Your income will depend on your experience, talents, and educational background. It also depends on the nation in which you are employed.
Your income will undoubtedly be greater than individuals who just have a high school diploma or a certificate if you have a master’s or doctoral degree in taxes from an American institution or any other international university.
Pakistan’s legal system is very competitive, and top attorneys get six-figure salaries.