What is Income Tax?

What is Income Tax?

Focus on the word INCOME TAX in the basic sentence below:

For each Tax Year, the government imposes Income Tax at a specified rate on every Person who has Taxable Income.

The discussion below will develop an understanding of the word INCOME TAX.

Income Tax is a Federal Tax which the Federal Government has imposed on Person with Taxable Income. 

In general, tax is a common burden payable by the citizen of Pakistan to make the Governance of the state financially possible. Income Tax is the tax imposed on the citizen of Pakistan in exercise of power of the Federal Government under item no. 47 of the Federal Legislative List, the constitution of Pakistan. The Income Tax is administered under the provision of Income Tax Ordinance, 2001. The Ordinance defines the word Tax as follows:

Tax[1] means any tax imposed under the income tax law. It also includes any penalty, investment tax, fee or other charge or any sum or amount leviable or payable under the Income Tax Ordinance, 2001.

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[1] See Section 63