The Federal levy, tax, on income (Income Tax) is governed by the Income Tax Ordinance, 2001 and Income Tax Rules, 2002. It is an annual charge on income. This includes taxable income, income subject to separate charge and income subject to final tax of a person for a tax year, and also includes global income of the resident person, even if it has already been taxed outside of Pakistan.

“Total Income” is the aggregate of income chargeable to tax under each head of income:
“Head of Income” – Under the Income Tax Ordinance, 2001, all income are broadly divided into following five heads of income:
 Salary;
 Income from property;

 Income from business;
 Capital gains; and
 Income from other sources

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