Tax Credits Chapter- 15
- TAX CREDIT FOR POINT OF SALE MACHINE (Section 64D)
(1) Any person who is required to integrate with Board’s computerized system for real time reporting
of sale or receipt, shall be entitled to tax credit in respect of the amount invested in purchase of
point of sale machine.
(2) The amount of tax credit allowed under sub-section (1) for a tax year in which point of sale
machine is installed, integrated and configured with the Board’s computerized system shall be
lesser of—
(a) amount actually invested in purchase of point of sale machine; or
(b) Rs. 150, 000 per machine.
(3) For the purpose of this section, the term point of sale machine means a machine meant for
processing and recording the sale transactions for goods or services, either in cash or through
credit and debit cards or online payments in an internet enabled environment.- Tax credit for exempt share from association of persons:
For individuals (Section 88)
Share of profit from an AOP derived by an individual is exempt from tax and does not form part of
total / taxable income. However, where the individual has any income chargeable to tax as total /
taxable income, other than the share from an AOP, then such share of profit is included in the total /
taxable income for rate purposes, i.e.
First, the income tax payable in calculated on taxable income inclusive of exempt share from AOP.
Thereafter, proportionate income tax payable in calculated on the income chargeable to tax, other
than the share of profit from AOP.
Technically this is not a tax credit (rebate in income tax payable) but for the sake of simplicity this is
termed as a tax credit. Accordingly exempt share of profits from the AOP is not treated as exempt
income and included in the taxable income; and
A tax credit is allowed on such exempt share of profits from the AOP calculated like other tax credits
by applying the average rate of income tax.Example: Mr. Asim has income from other sources Rs. 5 00,000 and share from AOP Rs. 230,000
and paid zakat Rs.8,000. Compute tax payable by him if tax credits and reductions other than AOP
share are Rs. 400.
Solution:
Mr. Asim
Computation of taxable income and tax liability: Rs.Income from other sources 5 00,000
Add: share of income from AOP (included for rate purposes) 230,000
Total income 7 30,000
Less Zakat paid 8,000
Taxable income 7 22,000Gross tax 5% x (Rs. 722,000 – 600,000) 6,1 00
Less tax reductions and credits as given in question 400
Balance income tax 5,7 00
Less income tax credit on share income from AOP (included for rate purposes)
(5,700 / 7 22,000 x 230,000) 1 , 816
Balance tax payable 3, 884- Tax credit for investment (Section 65B)
(a) Where a taxpayer being a Company invests any amount in the purchase of a plant and
machinery for the purposes of extension, expansion or balancing, modernization and