Is there any agricultural rental income tax in punjab? If so, how much is it?

Question

Some agricultural income related questions:
1) Is there any regime in Pakistan for taxing agricultural RENTAL income? If so, how much would such a tax be for someone renting out @ PKR 70,000 / acre
2) If agricultural land is leased / rented, then who is responsible to pay the agricultural income tax - the tenant or the landowner?

3) The Punjab Agricultural Income Tax Act mentions the filing of provincial returns to determine the actual taxable income, after costs, of farmers. Is that practically what happens? Because it seems like the provincial government calculates income tax arbitrarily and using their own methods in the absence of data on the taxable income of farmers.

Answer 1

1. Tax on Agricultural Rental Income 

Yes, there is a regime for taxing agricultural rental income. Under the Punjab Agricultural Income Tax Act, "Agricultural Income" is explicitly defined to include any rent or revenue derived from land used for agricultural purposes.

2. Responsibility for Payment

The responsibility to pay the tax falls on the owner of the land, but legal definitions can extend this liability. 

• The Landowner: Primarily liable as the "receiver of rent".
• The Tenant/Lessee: Under Section 4 of the Act, if a tenant or leaseholder is the one earning the income from the produce, they are responsible for the tax on that earned income.

3. Recommendation: To avoid arbitrary per-acre assessments, it is now legally safer to file a Provincial Agricultural Income Tax Return declaring actual expenses to lower your taxable base.