Finance Act 2014 introduced new scheme of taxation according to which:

Company shall be required incorporate 17% of its accounting profit being Alternate Corporate Tax (ACT) in to tax computations so as to pay higher of :

1. Tax @ 17% of accounting profit
2. Actual tax ;or
3. Minimum tax on turnover u/s 113 of the Income Tax Ordinance(ITO), 2001.

Accounting profit shall be adjusted for following before applying above mentioned ACT

1.Exempt income under Income Tax Ordinance, 2001.

2.Capital gains on disposal of specified securities

3.Income as a result of import. i.e. Presumptive Tax Regime(PTR) or Final Tax Regime (FTR)

4.Dividends PTR/FTR

5.Supply of goods subject to PTR/FTR

6.Execution of contract subject to PTR/FTR

7.Exports indenting commission subject to PTR/FTR

8.Prizes and winning subject to PTR/FTR

9.Brokerage and Commission subject to PTR/FTR

10.Income subject to tax credit u/s 65D and 65E of the ITO, 2001.

Any excess tax paid over and above actual shall be available for carry forward against tax payable for immediately succeeding 10 tax years.

The carry forward of Alternate Corporate Tax shall not dis-entitle the person to claim carry forward of Minimum tax on the basis of turnover u/s 113 of  the ITO, 2001.

The Scheme shall be applicable from the tax year 2014 i.e. Income Tax returns due on 31 December 2014 shall be required to consider Alternate Corporate Tax.