dividend, profit on debt and prize bond under FTR

ahsan_aziz_arain · 07-30-2009, 01:26 AM

salam dears
what is the treatment of incomes which fall under F.T.R as well as under income from other sources like dividend, profit on debt and prize bond.?

ahsan_aziz_arain · 07-31-2009, 06:37 PM

DIVIDEND , PROFIT ON DEBT AND PRIZE BOND ARE TAXABLE UNDER FTR BUT ALSO FALL UNDER THE HEAD "INCOME FROM OTHER SOURCES".

ahsan_aziz_arain · 08-01-2009, 09:48 PM

please tell the treatment !!

faisal_desperado · 08-02-2009, 09:55 PM

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by ahsan_aziz_arain
 salam dears
what is the treatment of incomes which fall under F.T.R as well as under income from other sources like dividend, profit on debt and prize bond.?
<hr height="1" noshade id="quote"></blockquote id="quote">

Dear,
Those incomes, which fall under FTR are not required to be shown any where while calculating Taxable income of a Taxpayer, rather it is to be shown as a footnote.

WHT with regards to Dividend and Prize bonds are deducted as a Final Tax, since they come under FTR. However, Profit on debt is required to be shown as Income from other source ,however if the prime business of a person is to earn profit on debt i.e. banks, leasings companies, financial institutions etc., then the same shall be treated as Income From Business rather than Income from Other Source.

Best Regards,

faisal_desperado · 08-02-2009, 10:09 PM

Dear,
As per section 151(3) Every person who pays profit on debt with regards to Profit on debt or deposit maintained by a banking company or a financial institution Or,
Profit on debt on Bonds, Certificates, Debentures or security issued by a banking company, shall be required to deduct Tax @ 10%, the tax so deducted shall be treated as a Final Tax against the income of the recipient on account of profit on debt.

Best Regards,

ahsan_aziz_arain · 08-03-2009, 02:13 AM

thanks faisal ,but, final tax deducted on profit on debt at 10% as per section 151(3) should be shown as a footnote or should be shown as income from other sources.
thanks

farhanm · 09-01-2010, 04:30 PM

I have taken personal loan from few banks and paying back in monthly installments. Kindly tell me whether i shall be entitled to a tax credit for a tax year in respect of any profit in the year on loan by scheduled bank.

Looking for reply.

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by ahsan_aziz_arain
 DIVIDEND , PROFIT ON DEBT AND PRIZE BOND ARE TAXABLE UNDER FTR BUT ALSO FALL UNDER THE HEAD "INCOME FROM OTHER SOURCES".
<hr height="1" noshade id="quote"></blockquote id="quote">

mirfawad · 09-01-2010, 05:31 PM

Income From Other Sources means income which can not be classified in other heads of income Specified by the Income Tax Ordinance, 2001 i.e Salary Income, Income From Business, Property Income and Capital gains.

Profit on Debt, Dividend Income and Prize bonds winnings will be income from other Sources. Now as far as your question regarding difference between Income Under FTR and Income from other source is concerned, it is stated that both have no relationship with each other. Income from other sources is only classification of Income. Whereas FTR income is concerned with chargeability of income to tax. For example in some cases Property income Is taxed under FTR regime but it does not mean that it is income from other sources rather it is Income from Property but is chargeable to Tax Under FTR Regime.

Where an individual has income Chargeable to tax under FTR refime then he is required to file statement u/s 115 (4) of the Incone tax ordinance, 2001. this statement is the Page no 2 of income ta return form. It is not included in taxable income.

mirfawad · 09-01-2010, 05:37 PM

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by farhanm
 I have taken personal loan from few banks and paying back in monthly installments. Kindly tell me whether i shall be entitled to a tax credit for a tax year in respect of any profit in the year on loan by scheduled bank.

Looking for reply.

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by ahsan_aziz_arain
 DIVIDEND , PROFIT ON DEBT AND PRIZE BOND ARE TAXABLE UNDER FTR BUT ALSO FALL UNDER THE HEAD "INCOME FROM OTHER SOURCES".
<hr height="1" noshade id="quote"></blockquote id="quote">
<hr height="1" noshade id="quote"></blockquote id="quote">

Mr. Farhan if you have taken loan from a scheduled Bank and for the construction of a house then you will be entitled to tax credit u/s 64 of the Income Tax Ordinance, 2001. if your loan is of personal nature then you will not be entitled to a tax credit.