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Discussion Question:
Tax Credit and its Treatment

Learning Objectives: This activity aims to enable the students to understand tax credit and its application in the light of related tax provisions of Income Tax Ordinance 2001.

Mr. Ali donates Rs. 30,000 annually to ABC University (Federal Government University). Taxable income of Mr. Ali for the tax year 2016 is Rs. 750,000 and assessed tax liability is Rs. 35,000. Consider above information and discuss the treatment of “Tax Credit” in the light of relevant provisions of Income Tax Ordinance 2001. Also discuss the situations where tax credit facility is granted and its effect on tax payer.

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