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+--- Thread: Contractual Income Tax (/thread-contractual-income-tax)
Contractual Income Tax - baqarsb - 04-02-2010
Tell me which case is correct???
<b>Case1</b>
January 2010 Salary 300,000 (Income Tax 300,000x6%= 18,000)
February 2010 Salary 300,000 (Income Tax 300,000x6%= 18,000)
Then there is change in March 2010 i.e. salary will be 350,000 from January 2010.
Total Tax He/She paid till Feb 2010 = 18000+18000 = 36000
Now in March Income Tax calculation will be
350000x6 (January to June)= 2100000*6%= 126000
126000 (Total Tax of 6 months)
126000-36000 (less Jan & Feb Tax) = 90000
Now Total Income Tax/remaining number of months
90000/4 = 22500
<b>March income tax will be 22500</b>
<b>Case 2</b>
March 2010 income 350000+100000 (Arrears)=450000
450000x6%= 27000
<b>March tax will be 27000</b>
- Sarfaraz.alam - 04-03-2010
Is this the Salary payment or payment against the services rendered?
<b><u>In case of Salary</b></u>
- The tax rate should be change,i.e. not 6%.
<u><b>In case of Services</b></u>
- If you are provided the inovice against the services or there is a contract in both cases, your case 2 is right. Means the March invoice should be 450,000 (including arrears) then the tax will be charge on whole amount i.e. 27,000/-. and for the April and onword this will be 21,000/- (350,000 x 6%).
- Jan Tax 18,000/-
- Feb Tax 18,000/-
- Mar Tax 27,000/-
- Apr Tax 21,000/-
- May Tax 21,000/-
- Jun Tax 21,000/-
<b> TOTAL 126,000/-</b>
- baqarsb - 04-06-2010
Thanks for the reply.