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Income Tax Act, 1967

1. Self-assessment system

1.1. In the 1999 budget, the official assessment system will be changed to the self assessment system in the following stages:

Type of tax payers Effective year
Companies 2001
Businesses, partnership and co-operatives 2003 *
Salaried individuals 2004(*changed to 2004)

1.1. Under this system, companies are required to compute their own tax, make payment of tax and file the Form C to IRB and no notice of assessment will be sent by the IRB.

1.2. The taxpayer is expected to compute his tax liability according to the tax laws, guidelines and regulations issued by the IRB.

1.3. A company is required to furnish an estimate of its tax payable by using Form CP204 at least 30 days before the beginning of the basis period for a year of assessment.

1.4. A company may revise the estimate of tax payable in the sixth month of the basis period by using the same form CP204. A notice of revised installment payment (CP206) will be issued by the IRB.

1.5. The estimated tax payable must be paid in equal monthly installments on or before the 10th of each month with the first installment commencing from the second month of the basis period. All payments are to be accompanied by the remittance slips (CP207).

1.6. The difference between the actual tax liability and the total installments paid must be settled on or before the last day of the sixth month from the date following the close of its accounting period.

1.7.  The company tax return (Form C) must be submitted to IRB within 8 months after the close of its accounting period.

1.8. Under the self assessment system, tax audits will be IRB key enforcement tool to ensure that the tax returns submitted are correct and have been prepared in accordance with the provisions of the law, guidelines and rulings issued by IRB.

2. Classes of income that are subject to tax

Profits from business

Employment income

Dividend, interest income

Pension, charge or annuity

Rental income, royalties

Gains or profits not falling within the above categories

3. Returns to be made by the company

Returns Description Due date
Form 204 Estimated income Not later than 30 days before starting of FY
Form C Annual tax returns 6 months from end of FY
Form R Tax credit Together with form C
Form E Employees details 30 days from date of issue
CP39 STD deductions 10th of following month
CP8 Company tax 10th of following month starting 2nd mth of FY

4. Returns to be made by the individual

Returns Description Due date
Form B / BE AR for resident 30 days from date of issue
Form M AR for non resident 30 days from date of issue
Form P Partnership returns 30 days from date of issue
Form T Trust and Estate return 30 days from date of issue

5. Tax computation

Gross income

Less :               Allowable expenses

Double deductions of expenses

=                      Adjusted income

Add :                Balancing charge

Less :               Capital allowance and balancing allowance

=                      Statutory income

Less :               Exemption of income for pioneer companies

Less :               Investment tax allowance

Less :               Reinvestment allowance

Less :               Previous years?business losses

Add :                Statutory income from other sources

=                     Aggregate income

Less :               Current year business losses

=                      Total income

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