Need a Lawyer Right Now?
I have paid zakat to the approved institution according to FBR's approved list of welfare organizations , can i submit the receipt to my employer to adjust my tax by deducting the zakat amount from my taxable income and are they authorized to do so as per income Tax law?
The taxpayers may reduce their total taxable income by the actual amount of Zakat paid during the tax year. It applies to all individuals (Salaried and non-salaried) during filing tax returns.
LowerCourt/District Court | 242/A, District Court Faisalabad
City: Faisalabad | 7-10 Years Experience | B.A, LL.B,LL.M (-)
Yes, you can submit the receipt to your employer, but, employer may adjust it from taxable salary if satisfied with documentation.
High Court Sindh | R-5, Sumaira Bungalows, Scheme 33, Gulzar-e-Hijri, Karachi
City: Karachi | 3-5 Years Experience | B.A, LL.B (-)
In accordance with tax laws in Pakistan, Zakat is deductible from taxable income under section 60 of the Income Tax Ordinance only if paid through the Zakat administration system. For amounts paid to an FBR approved charity, Zakat generally qualifies as a donation under section 61 and, thus, is not a Zakat deduction. In this case, the amount you can deduct from taxable income is not directly applicable; instead, you only receive a limited credit for the amount paid to the exempt organization, which generally can be claimed as a credit available in the year you file your return. As a result, your employer can only make an adjustment to your tax liability based on the payment made as a Zakat deduction under section 60; if not, your employer will not have the authority to make any such adjustments when processing your wages. For further quieries contact me at advtalharehman@gmail.com.
Lower Court/District Court | 351 Kiyani Chambers Session Court Gujranwala
City: Gujranwala | 1-3 Years Experience | LL.B (Honours) (-)
No, your employer is not authorized to adjust your tax liability by deducting Zakat paid to a welfare organization from your taxable income, even if the organization is approved by Federal Board of Revenue (FBR). In pursuance of law, Under the Income Tax Ordinance, 2001, Zakat is not treated as an allowable deduction from taxable income. Despite the zakat paid under the Zakat and Ushr Ordinance, 1980 (i.e., deducted at source through the banking system) is already recognized separately. Donations to FBR-approved institutions may qualify for a tax credit (not deduction) under Section 61 of the Income Tax Ordinance, subject to limits and conditions.
Lower Court/District Court | Chamber no. 63 new judicial complex talagang
City: Talagang | 1-3 Years Experience | LL.B (Honours) (-)
We provide multiple practice sessions specifically designed to help aspiring lawyers prepare effectively for the Law GAT (Graduate Assessment Test) as per outline.
Success! Your action was completed.
“Allah is sufficient for me. There is none worthy of worship but Him. I have placed my trust in Him. He is the Lord of the Majestic throne.”