The Federal Constitutional Court has upheld the legality of the super tax under Section 4C of the Income Tax Ordinance, overturning earlier rulings by the Islamabad High Court and reinforcing the government’s authority to impose the levy.
The 293 page detailed judgment was issued by Chief Justice Aminuddin Khan, declaring that the super tax is constitutional and should be treated as a separate levy, independent of standard income tax.
The court ruled that Parliament has full authority to impose taxes on income under existing laws and said that the Islamabad High Court had exceeded its jurisdiction by directing the Federal Board of Revenue (FBR) to issue circulars against the tax.
According to the judgment, the super tax applies from tax year 2022 onward and extends to all income, including those falling under separate tax regimes. The court clarified that the levy is not a replacement for income tax but an additional charge.
The ruling also stated that capital gains will fall within the scope of the super tax, while its application on petroleum and exploration companies will remain subject to contractual and legal limitations.
The court directed that welfare and pension funds seeking exemption must obtain proper certification, while reaffirming that retrospective taxation through legislation is legally permissible. At the same time, the judgment clarified that income already exempt from tax will not be subject to the super tax.
This includes gains from property or shares where exemptions apply, inheritance, certain long term holdings, and income from agricultural land.
Keep it up Great achievement well done