Calculation of Donation/Charity to IDPs

[zara khan]

Charity/Donation to IDP deducted by employer. Is it totally exempted? Please tell me following calculation is correct

gross tax is Rs.3500 for the year 2008-09
Charity paid Rs.1100.
Net Payable Rs.2400

[faisal_desperado]

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by zara khan</i>
<br />Charity/Donation to IDP deducted by employer.Is it totaly exempted.Please tell me following calculation is correct

gross tax is Rs.3500 for the year 2008-09
Charity paid Rs.1100.
Net Payable Rs.2400
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">

Dear,

The said calculation is wrong.
If the charity/donation has been paid to specified institutions as provided in section 61 of part X, Tax Credit, then tax credit will be provided as per the method described in the said section.

However, there are some exceptions to the said section i.e. if charity/donation is paid to those institutions, then straight deduction may be made from the total income to arrive at the taxable income. In this regard, charity / donation should not exceed the threshold provided in the section 61 i.e. for the purpose of tax credit, maximum 30% of taxable income may be exempted as charity / donation in case of Individuals and AOPs and 15% in case of companies for the tax year 2009 ( 15% has been subsituted by 20% by finance act 2009)

All queries will be appreciated.

Regards,