Salary Tax Adjustments Possible Through Employers as well ? Instead of Waiting for Refunds from FBR !
Salary Tax deducted by the employer under section 149 from monthly salary payments to an employee is paid by the employer in the government exchequer on monthly basis and is declared by the employer in his monthly withholding statements. Employee declare it in his annual income tax return.
If employee has paid during the year or in previous years excess tax in other heads also and have tax refunds in his annual income tax return then he may take benefit of its adjustment in the monthly tax deductions on salary from employer.
if during the year employee has paid tax on purchase of car then he may produce the evidence to his employer and employer can give him adjustment of excess payment of advance income tax during the year. Meanwhile if it is carried forward of income tax refunds of previous years even then employer can allow him adjustments.
Section 149 of the income tax ordinance 2001 clearly explains this matter and advance tax payments by the employee in other heads which are other than salary heads can be given the benefit to the employee.
This matter recently also highlighted by the IT expert of PRAL and his description is very clear and some segment of the tax experts are misleading the matter only due to non applicability Practically.
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Payment of Zakat and Donation to registered NPO, also reduces the taxable salary and tax deduction by employer can be reduced by giving the evidence of Zakat and donation paid.
These adjustments can be done through IT 3 form signed by employee along with evidence and submitted to employer.
Can any one comment on this scenario please.
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