Introduction

Tax consultancy
Generating NTN and Filing income tax returns are difficult for many peoples. We know
that in Pakistan tax laws change usually, and many salaried persons and businessmen are
unaware of changing in rules that govern deductions, credits and reportable income.
Consequently, some have no NTN and many of them make mistakes in filling income tax
returns. Sometimes they pay more than tax and sometime less than tax. When they pay
less than tax they will be subject to audit and when they pay more than tax, they loss their
money.
In order to solve such kind of problems, it needs to be a consultancy which called “Tax
consultancy”. Because these types of problems are additional burden on Income tax
offices and the professional lawyers take more money which tax payers do not afford.
Tax consultancy is a business that provides service to the tax payers in generates NTN,
file income tax returns and solve many other issues related to tax. A good tax consultant
should understand the rules and laws of tax.
Our tax consultancy shall one of the best in Bannu. It will solve all the problems related
to NTN and income tax returns with low cost and in minimum time than other
professionals. Income tax paying is an essential for individuals and government. Both can
get benefits from it. Individuals who pay income tax and file their income tax returns will
not pay withholding taxes, such as tax on banking transactions, registration of vehicles
and transfer of property etc.

Income tax
An income tax is a tax compulsory on individuals or entities (taxpayers) that fluctuates
with respective income or profits (taxable income). Income tax is commonly calculated
as the product of a tax rate time’s taxable income. Taxation rates may vary by type or
characteristics of the taxpayer. The tax rate may increase as taxable income increases
(referred to as graduated or progressive rates). The tax imposed on companies is
commonly known as corporate tax and is charged at a smooth rate. However, individuals
are taxed at various rates according to the slab in which they fall. Further, the partnership
firms are also taxed at flat rate. Most authorities enforce locally prepared helpful
organizations from tax. Capital gains may be taxed at different rates than other income.
Credits of various sorts may be allowed that reduce tax. Some jurisdictions impose the
higher of an income tax or a tax on an alternative base or measure of income. Taxable
income of taxpayers resident in the jurisdiction is generally total income less income
producing expenses and other deductions. Generally, only net gain from sale of property,

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including goods held for sale, is included in income. Income of a corporation’s
shareholders usually includes distribution of profit from the corporation. Deductions
typically include all income producing or business expenses including an allowance for
recovery of cost of business assets. Many jurisdictions allow national deductions for
individuals and may allow deduction of some personal expenses. Most jurisdictions either
do not tax income earned outside the jurisdiction or allow a credit for taxes paid to other
jurisdictions on such income. Nonresidents are taxed only on certain types of income
from sources within the jurisdictions, with few exceptions. More jurisdictions require
self-assessment of the tax and require payers of some types of income to withhold tax
from those payments advanced payment of tax by taxpayers may be required. Taxpayers
not timely paying tax owed are generally subject to significant penalties, which may
include jail for individuals or revocation of an entity’s legal existence.

Income tax of Pakistan

Governments have been collect revenues from their population in different forms. It was
necessary in order to meet the different expenditures which the governments had to incur.
The nature and the extent of expenditures incurred by the governments have undergone a
lot of changes in the modern world. New sources of collecting the necessary amounts
have also been found. Now a state has to spend a lot of money on its defense
requirements. Development expenditures and expenditures on general public services
(schools, hospitals, etc.) have also been increased manifold. New sources of receiving the
necessary amounts have also emerged. For example, now a country can receive some
resources from another country, or an international organization either as loans or as aids.
Every country tries to develop its internal resources, because different types of problems
are associated with the amounts received from external sources. A government tries to
generate internal revenue from different sources. The stability of any state and its
economic structure is strongly correlated with the shape and framework of its taxation
system.
In our country also like all other countries of the world, the government receives different
types of taxes in other to finance its day-to-day expenses defiance requirements and
development projects. These taxes include Customs and excise duties, income tax, sales
tax, etc. the government has recently introduced the ‘Zakat’ and ‘ushr’ system, the
income from which is spend only according to the Quranic injunctions.

Income Tax Returns

Income tax return is the form in when assesse files information about his income and tax
thereon to income tax department. Various forms are ITR 1, ITR 2, ITR 3, ITR 4, ITR 5,

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ITR 6 and ITR 7. When you file a belated return, you are not allowed to carry forward
certain losses.
The income tax act, 1961, and the income tax rules, 1962, obligate citizens to file returns
with the income tax department at the end of every financial year. These returns should
be filed before the specified due date. Every income tax return form is applicable to a
certain section of assesses. Only those forms which are filed by the eligible assesses are
processed by the income tax department of India. It is therefore imperative to know
which particular form is appropriate in each case. Income tax return forms vary
depending on the criteria of the source of income of the assesse and

Federal board of revenue

The federal board of revenue is the organization under the federal government that
explores corruption about taxes and money-laundering. Federal Board of Revenue also
operates special broadening of tax base zones that keep tax evaders under surveillance
and compulsorily bring them into the tax net through its inspectors. These zones have
exclusive powers to scrutinize tax evaders. BTB-Karachi nets potentially big tax evaders
with the deployment of inspectors in land revenue for field operations, and thus,
contributes comparably greater than other BTB Zones in the country. FBR collects
intelligence on tax evasion and administer tax laws for the government of Pakistan and
acts as the central revenue collection agency of Pakistan.

How to File Salary Income Tax Return online with FBR

In salaried persons some are the filers and some are the non-filers. There are the
advantages and disadvantages of the filers and non-filers respectively. By default every
salaried person are paying income tax, which are doing governments jobs and private
jobs in companies. So until they do not e-file income tax returns, they do not called filers.
They need to file the income returns on FBR website which becomes filers.
To e-file income tax returns we will calculate income for financial year which
starts from july1 previous year and ends at 30th June current year.
We will calculate income from salary during current financial year and calculate
other income during current financial year. For example, the salary is 700,000. We can
check “tax deducted” from pay slip. We will calculate the tax deducted which are
deducted during current financial year. If we are paying withholding tax in utility bills,
these taxes are basically income tax, we will also calculate it. We will calculate other
taxes which we pay during current financial year such as registration of vehicles, buying

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and selling of property and other banking transactions. These are some basic information
about “114” form.
We should have information about expenses during current financial year, such as
electricity consumption, educational expenses and other home expenses. We will declare
our assets also, such as car, property and other assets.
We will type this information on FBR website, if we have already NTN
number we will have to “login” in FBR website and e-file income tax returns. But if we
have not NTN number, we will generate it.

How to generate NTN number

NTN is the abbreviation of national tax number. First of all, we will go to Google. In
Google type FBR registration. In below menu IRIS link will be open, then click on it and
go to FBR official website. Click on registration for unregistered person.
New registration form will be open. First we will type CNIC number. NTN will
generate on the basis of CNIC. Type MR in the “prefix” and type yours name first word
in first name box. If the person has the middle name, type it and then type last word of
the name in last name box. In current service provider we will type the name of the
network which you are using. Then we will type mobile number with treasure code and
type it again in “confirm cell number”. After cell number we will type email address that
it did not use in FBR before it. Type it again in “confirm email”. Enter HVVS code and
enter the codes that system sends to your email address and to your mobile number
through SMS. The NTN number will generate successfully.
The login ID and password of FBR website will send through SMS and email.
CNIC number will be your NTN number. After this, we will login in IRIS by ID and
password which FBR has been already sends us. By login, IRIS page will open and we
will go to drafts, click on reception. “181” form will show in front of us. We will fill it.
First, we will type the information about self-related to NADRA, such as name, CNIC
number, nationality, registered address, date of birth and type the date at which the NTN
number has been generate. Then we will type the property information, such as the
property is commercial, residential or is on lease or on rent etc. the property form will
show, there are two options. One will be local and the second will be foreign. Local
nationals will type information in local and foreigners will type in foreign. We will type
commercial in type, because the commercial property is for the business and type in
measurement unit “others”. Then type the address of property and then type the city and
district. Then type the capacity of property. We will show in property that the property is
on lease, rent, commercial or residential. Type the shares percentage which you have own
in business then click on OK. The form will save automatically. We can re-edit it.

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Problem statement
The main problem that is also the motivation of this consultancy is the
cumbersome, technical, and highly difficult procedure of getting NTN and filling of
income tax returns. Especially, the salaried class and the business persons need NTN and
file the returns but there is no such professional consultancy that provides the service
very professionally, and in low cost.
The filers of income tax returns file their income tax returns online on FBR
website by the persons of income tax department or lawyers. Filers pay heavy amount for
it every year. If we open a tax consultancy to make NTN and file the income tax returns
online by charging low amount and in lessor time, it will be surely of greater importance
and will fulfill the local demands of salaried class and business community. The new
NTN seekers and the filers could easily file their income tax returns by low amount and
with fewer efforts in Bannu.

Objectives of the Project

 To establish a consultancy to make the NTN and file income tax returns
easier.
 To provide low cost and easy solutions of income tax issues in filing.

Significance of the Project

The filler will get advantages on banking transactions, buying and selling of
property and registering of vehicles which are not give to the non-fillers.
FBR get tax from salaried persons and through getting NTN and filling status, a
numerous advantages can be received.
 Banking transaction: when non filer transfers money through RTGS or through
pay order or by any other method and amount accedes from 50,000. The non-filer
will pay 0.6 percent tax on the amount. And filer will not pay any tax.
 Online shopping: When non filer purchases anything from foreign website he
will pays 3 percent tax on it, and filer pays 1 percent tax on it.
 Salary: If the salary is 400,000 annually. There is no tax on it. If salary accedes
from 400,000 up to 800,000annually, both filers and non-filers will pay 1000
rupees flat rate. From 800,000 up to 1200,000 both will pay 2000. From 1200,000
up to 2500,000 both will pay 5 percent income tax on the acceding amount from
1200,000. At least, both filer and non-filer pay income tax on salary equally. This
tax deducted authority is employer.

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 Company: If any company gives the services and the company is the non-filer,
they pay 14.5 percent tax and if the company is filer they pay 8 percent tax.
 Business: In case of sole proprietorship and partnership the non-filer will pay
17.5 percent tax and filer will pay 10 percent tax.