Taxability of Trainers and Consultant's fee

[danishayub_76]

Dear All.

Our company is registered under section 42 of the companies ordinance 1984 (as a non profit company), We very often make payments to the trainers and consultants in shape of fees.
I need to know the taxability of the following payments as prescribed by the Tax authorities in Pakistan

i. Trainers' Fee
ii. Consultancy Charges/Fee.
iii.Stipend to the workers/Artisans.
iv. Reimbursement of Travelling Expenses (Workshop participation/Field area travelling)

Best wishes

Danish Ayub

[kamranACA]

Dear,

Stipends normally come under the definition of salary, if these are fixed monthly payments. Tax would be deducted on stipends if these exceed the maximum non-taxable annual limit of salary under section 149 of ITO 2001. If these don't exceed no tax will be deducted.

Trainers and consultants normally work under a contract and are typically not the employees of the institutes. Tax is deductible on services under contract @ 6% of the amount paid. However, no tax is deductible if the total annual payment made to a person does not exceed Rupees 10,000 that is the maximum non taxable limit for such deductions.

Re-imbursments are typically not the fix allowances,and represent the costs actually incurred in connection with performance of duties. No tax is deductible while making such payments. However, if these don't represent the expenses actually incurred for the performance of duties or are paid as fixed allowances these are taxable along with salary on rates applicable to salary.


Regards,


KAMRAN.

[LapTop]

I am totally agreed with Kamran

[danishayub_76]

Kamran Bhai.

Thanks for your valuable information.

Best Wishes.

Danish Ayub

[kamranACA]

Pleasure is all mine.