Personal Finance An Overview

Income Tax :-

Taxation according to a person’s ability to pay is universally accepted principle, and income is considered a satisfactory though not a sufficient index of such ability to pay. Income Tax is, therefore, generally recognized as a highly equitable form of taxation. A tax levied on income can nor normally be shifted to others and thus its incidence is on those for whom it is intended. Since income tax is progressive in nature, it tends to reduce economic disparity. Tax rates and method of calculating taxable income varies with fiscal status of the tax payer. Following are the broad categories of taxpayers:-

Companies:

·  Non Salaried Individuals, Association of Persons (AOP), · Hindu undivided families(HUF)  · Salaried individuals

Wealth Tax: -

is levied on that wealth of individuals which exceeds their liabilities on the valuation date. Firms and limited companies pay Wealth Tax on value of immovable properties held for construction and sale or letting out.

Capital Value Tax :-

It is payable by individuals, firms and companies which acquire an asset by purchase or a right to use for more than 20 years.

Workers Welfare Fund: -

It is levied @ 2% of the income where the taxpayer owns an industrial establishment and his income is Rs. 500,000 or more.

Corporate Asset Tax: -

It is levied through section 12 of the Finance Act, 1991. This is one time levy payable by a company as defined in Companies Ordinance, 1984, on the value of fixed assets held by the company on the "specified date".