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The Income Tax Act of 1886 was a general income tax that had been imposed
on traders by some of the provinces. This Act of 1886 was a great improvement
on earlier enactments. Its basic scheme, by and large, survives till today. It
introduced the definition of “agricultural income” which is almost the same as in
the Income Tax Ordinance 2001. This Act continued in force for 32 years.
(This will give you idea about how the taxation system started in Pakistan)
Now Answer to Following Question;
1. Briefly explain difference in direct and indirect taxes and different kind of
such taxes prevailing in Pakistan. (Write detail on separate page)
Income tax law deals with the levy of tax on the income of a person.
The scope of income tax law is defined in section 4 of the Income Tax Ordinance, 2001 in the following
manner: ―
“Income tax shall be imposed for each tax year on every person who has taxable income, as per the
applicable tax rates”
Perusal of the aforesaid provision of law rises following questions in our minds: