Tax Book 2023

Common Rules Chapter- 16

All companies except given below Tax year 1st July to 30th June 133 (R)/68, 31- 07 - 1968

Classes of Taxpayer Special tax year

Notification No. (SRO) and

Date

Companies manufacturing sugar 1 st Oct to 30th September 134(R)/68, 31- 7 - 1968

All persons exporting rice 1 st January to 31st December 367(I) /74, 14- 01 - 1974

All persons carrying business of rice

husking

1 st September to 31st August 1153 (I) /79, 10- 12 - 1979

All persons carrying on business of

manufacturing and dealing in

shawls

1 st April to 31st March 505 (I) /80, 1 3 - 05 - 1980

All insurance companies 1 st January to 31st December 878 (I) /95, 30- 08 - 1995

9.3 Transitional tax year:

If a normal tax year or special tax year changes then the period from the day next following the last

full tax year to the date of commencement of new tax year shall be treated as transitional tax year.

Example:

You are required to determine the tax year in the following cases:

1. XYZ Textiles Ltd. year end on 30 September of each year. Determine the tax year for the
   income year starts on 1 October 20 21 and ends on 30 September, 20 22.


2. Ahmed Ltd. is a subsidiary of Don Limited. The company is granted special year end of 30
   November. You are required to determine the tax year of its income year 1 December, 20 21 to
   30 November, 20 22.
   Solution:
   In both of cases, the tax year is 20 23 as the next year end June falls within the calendar year of 20 23.
   Example:
   The Normal income year of Azad (Pvt.) Limited is 30 June, 20 22. The company however sought
   permission to adopt special income year of 30 September of each year. The concerned
   Commissioner Inland Revenue has granted approval to the said company to adopt special year of 30
   September. Determine the Normal, transitional and special tax year?
   Solution:
   (a) Normal tax year will be 20 22 for the income year relevant to the 1 July 20 21 to 30 June, 20 22.
   (b) Transitional tax year will be 20 23 for the period relevant to the period 1 July 20 22 to 30
   September, 20 22.
   (c) Special tax year will be 20 24 for the income year 1 October, 20 22 to 30 September, 20 23.

9.4 Change in the tax year:

If a person wants to change the tax year then he shall apply to the Commissioner Inland Revenue.

The Commissioner Inland Revenue shall grant permission subject to condition, if any, only if the

person has shown a compelling need for the change;

If the application is rejected, the Commissioner Inland Revenue shall provide an opportunity of being

heard to the person and shall record in the order the reasons for such rejection. In this case the

person may file a review application to the Board and the decision of the Board shall be final.