Seventh Banking Schedule of Income Tax Ordinance 2001: PBA proposes comprehensive amendments

Pakistan Banks Association (PBA) has proposed comprehensive amendments in the Seventh Schedule (Banking Schedule) of the Income Tax Ordinance 2001 to effectively deal with the issues of bad debts, sub-standard loans, minimum tax, monthly advance tax, settlement of tax-related disputed cases and resolution of other legal issues relating to the banking sector through Finance Act 2011.
Sources told Business Recorder here on Sunday that the PBA has proposed major changes in the Seventh Schedule of the Income Tax Ordinance 2001 during budget (2011-2012). Through Finance Act 2011, the PBA has proposed to introduce some new provisions in the Seventh Schedule of the Ordinance 2001.
According to the PBA budget proposals, non-imposition of tax on agriculture income has created a colossal gulf of socio-economic imbalance within the society. It is nearly impossible to increase the tax- to-GDP ratio without imposing tax on agriculture income, which accounts for nearly 25% of GDP of Pakistan. The imposition of the tax on agriculture income will increase government's revenue and remove the fiscal constraint faced by the federal government.
In its budget proposals for next fiscal, the PBA has proposed the following amendments in the Income Tax Ordinance 2001 and rationale behind each proposal:
1. Carry forward of provision in excess of 5% to future years for Consumers and SMEs:
Through the Finance Act, 2010, the banking companies have now been allowed to claim bad debts provisions for Consumer and Small & Medium Enterprises' (SME) advances and off-balance sheet items at 5% of total advances for consumers and SMEs. However, the drafting of the amendment is not complete, as corresponding changes for carry over of un-absorbed amount exceeding 5% limit have not been made in the subsequent lines.
Under the existing provision, " Provisioning in excess of 1% would be allowed to be carried over to succeeding years". The proposed provision said, "Provisioning in excess of 1% and 5%, as the case may be, would be allowed to carry over to succeeding years. Provided that if provisioning is less than 1% and 5%, as the case may be, of the total advances, then actual provisioning for the year shall be allowed".
The rationale behind the proposal is that the absence of reference to " 5%" implies that the un-absorbed amount of provision for bad debts on Consumer and SMEs in excess of 5% in a year cannot be carried forward and adjusted against subsequent years. This would result in adverse accounting implications whereby the banks will not be able to recognise a deferred tax asset on such permanent difference.
SME sectors contribute the substantial percentage toward country's GDP, and provide 90% of the jobs. Government is encouraging Banks to expand the advances to SME sector, particularly due to huge damages/losses of recent floods. However, there are heavy losses in consumer loans and banks having large portfolios are not covered in 5% capping. Therefore, to provide a level playing field the required amendment is required.
This law is encouraging banks not to finance in consumer and SME sector due to the possible tax loss in case these advances go classified. External auditors may force banks not to record deferred tax asset on the provision exceeding the threshold.
2. Sub standard loans:
It has been proposed that the amounts of bad debts classified, as sub-standard should be allowed as an expense. As per existing provision, " The amount of bad debts classified as sub-standard under the Prudential Regulations issued by the State Bank of Pakistan shall not be allowed as expense". The proposed provision is that the condition should be removed by deleting the relevant clauses (d), (e) & (f).
The rationale is that the addition of bad debts falling under the "sub-standard" category is a timing difference and in the subsequent period it will change its character by falling into "doubtful" or "lost" category as the case may be or will become good and provision will be reversed and taxed accordingly.
2.Allowability of 1% of total advances as charge against Bad & Doubtful Debts:
In case of provision for advances and off balance sheet items, the PBA has recommended that Seventh Schedule should be restored in its original form. Otherwise allow-ability of provisions which has been restricted to one percent (1%) of the amount of total advances other than Consumer & SME needs to be revisited to increase to two percent (2%).
Unlike other industries lending is main source of business of the Banks, therefore, a certain level of losses are naturally expected and hence should be allowed. 1% cap is short to cover provisioning in accordance with SBP regulations.
The PBA said that the Taxation Officer is interpreting total advances as 'Advances' shown on the face of the balance sheet (net of provisions), therefore an explanation should be inserted in Rule 1(c) of the Seventh Schedule that total advances means 'Gross Advances' before provisions for Bad & Doubtful Debts.
Under the existing provision, " Provisions for advances and off balance sheet items shall be allowed upto a maximum of 1% of total advances and provisions for advances and off-balance sheet items shall be allowed at 5% of total advances for consumers and small and medium enterprises (SMEs) (as defined under the State Bank Prudential Regulations).
It has been proposed that an explanation should be added. For the removal of doubts, it is clarified that the term total advances means Gross advances appearing in the notes to the financial statements of the Bank before excluding the provisions for bad debts.
The rationale is that the advances (net of provisions) appearing in the balance sheet excludes the debts against which the Bank has specifically created provisions (non-performing debts). Accordingly, it would be most illogical to exclude these advances from the statutory limit of 1%/ 5% as they actually represent a genuine loss in recoverability of income.
In other words, to exclude the provisions from the gross advances would be to disallow the actual provisions twice, which cannot otherwise be claimed under any provisions of the Seventh Schedule.
3. Transitional provisions - Rule 8A:
Through the Finance Act, 2010, the Seventh Schedule has been amended to include that amounts provided for in or prior to the tax year 2008 which were neither claimed nor allowed as a tax deductible in any tax year, will be allowed in the tax year in which such advances are actually written off against such provisions, in accordance with the provisions of sections 29 and 29A.
The above amendment requires change in order to avoid misinterpretation and ambiguity.
Under the existing provision, " Amounts provided for in the tax year 2008 and prior to the said tax year for or against irrecoverable or doubtful advances, which were neither claimed nor allowed as a tax deductible in any tax year, shall be allowed in the tax year in which such advances are actually written off against such provisions, in accordance with the provision of section 29 and 29A".
The proposed amendment said that the " Amounts provided for in the tax year 2008 and prior to the said tax year for or against irrecoverable or doubtful advances, which were not claimed or not allowed as a tax deductible in any tax year, shall be allowed in the tax year in which such advances are actually written off against such provisions". However, in cases where provisions relating to consumer advances were not fully allowed u/s 29A and also written off before applicability of seventh schedule, the same would be allowed u/s 29A.
It is hard to comprehend a situation whereby a Bank can demonstrate that a write off of bad debts was neither claimed by the tax payer nor disallowed by the tax authorities, the association said.
4. For the settlement of disputed cases for earlier years a clause should be inserted:
Presently no such provision is available in the Seventh Schedule. It has been proposed that a new provision be introduced in the Seventh Schedule. According to the new provision, "8AA Settlement of disputes for early years (1)- The principle contained in the Schedule read with section 29 for taxation of provisions for bad and doubtful debts may also be applied for earlier years as well on the option of a bank to settle the disputes pending, if any, in appeals and references.
(2) The bank will apply in writing to the Commissioner. The Commissioner will re-determine the taxable income after making necessary adjustments in accordance with Section 29 and will determine the tax payable thereon.
(3) Notwithstanding anything contained in this Ordinance, the Commissioner shall serve an order on the bank after applying the rule 1(c) of this Schedule read with section 29. In pursuance of the order of the Commissioner, appeals or references, if any, pending before any appellate authority or the Court, will be withdrawn by the taxpayer or the Commissioner, as the case may be.
(4) The requirement to produce auditor's certificate shall not apply for this rule.
(5) All provisions/write-offs disallowed for earlier years relating to Section 29A would also be considered under Section 29.
In section 29, after sub-section (1), the following proviso with retrospective application shall be inserted:
Provided that a Scheduled Bank shall be allowed in any of the relevant assessment year under the repealed Ordinance or tax year under this Ordinance, deduction in respect of any provision made by it in the annual audited accounts in accordance with guidelines issued by the State Bank of Pakistan.
Explanation: This provision, notwithstanding any limitation period contained in the repealed Income Tax Ordinance 1979 or Income Tax Ordinance, 2001 for finalisation of assessment or re-assessment or amendment of assessment, shall deem to have always been applicable, and completed assessments, at the option of the bank under Rule 8A of the Seventh Schedule, shall be reviewed accordingly by the Commissioner of Income Tax.
Cases where banks do not adopt rule 8A, provisions disallowed before the 7th Schedule will continue to be allowed under section 29 including the amounts disallowed under previous section 29(A)." it added.
5. Transitory provisions - Provisions other than bad and doubtful debts: The PBA has recommended to add following sub rule in rule 8A to cater transitional provision against provision for other expenses. Provisions for other expenses including provisions for employees' post retirement benefits not allowed for tax year 2008 or before shall be allowed in the tax year in which these are actually paid or written off as the case may be.
There are certain other charges like post retirement benefits etc which were used to be charged to Profit and Loss account on accrual basis but were allowed by the department on actual payment basis. These have not been covered in rule 8A inserted by Finance Act 2010.
6. IAS 39 & 40 whilst arriving at Taxable income:
The banking companies have not adopted and applied the requirements of IAS 39 and 40 in the preparation of its annual accounts in view of the instructions issued by the SBP under BSD circulars. However, the taxation officer tends to amend the assessment on this account by subjecting to tax the MTM adjustment by taxing the unrealised losses.
Under the existing provision, the " Adjustment made in the annual accounts, on account of application of international accounting standards 39 and 40 shall be excluded in arriving at taxable income". It needs clarity and alternative treatment, the association said. Since the applicability of IASs 39 and 40 have specifically been deferred by the SBP, the financial assets and liabilities of the banks are classified, measured and reported under the SBP's BSD circulars. Accordingly additions made by the tax department on the plea that unrealised losses due to MTM are in accordance with IAS 39 and 40 is both factually and legally incorrect.
7. Auditors' certification:
The condition of auditors' certificate for the claim of bad debts now appears to be superfluous and should be removed. Under the existing provision, " Provided a certificate from the external auditor is furnished by the banking company to the effect that such provisions are based upon and are in line with the Prudential Regulations". The proviso to Rule 1(c) should be deleted. Since the charge for provision for bad debts in the financial statements are subject to external audit by auditors' on the panel of SBP, who also examine the adherence to the Prudential Regulation.
8. Minimum Tax:
In Finance Act 2010, rate of minimum tax has been enhanced from 0.5% to 1% on turnover of the bank. Under section 113 of Income Tax Ordinance, 2001, the minimum tax rate should be brought to the previous rate of 0.5% of turnover. The increase in minimum tax has further burdened banks, which are already in losses due to increase in non-performing advances, which is an aftermath of flood disaster. This has significantly increased tax charge of the banks despite having tax losses, PBA said.
9.Monthly advance tax: The proposal is to give compensation on monthly advance tax payment. Under the existing provision, " 5. Advance tax. -
(1) The banking company shall be required to pay advance tax for the year under section 147 in twelve equal instalments payable by 15th of every month. Other provisions of section 147 shall apply as such".
It has been proposed that the banks should be given KIBOR based compensation on utilisation of banks' money in form of monthly advance tax. The banks incur heavy cost for such kind of advance payments on monthly bases. For example advance tax monthly instalment paid in January 2009 (Tax year 2010) credit shall be given at the time of filing return in September 2010. Banks can invest these funds to earn considerable yields, which in turn will be subject to tax and thus FBR will also be going to be the beneficiary. Board insists on monthly payment of advance tax then interest on the basis of Karachi Inter Bank Offered Rate (KIBOR) should be given for utilising the money [up to assessment year 1997-98, Department used to pay 6% compensation on such funds). For utilising heavy amount as advance tax from the bank every month, the government should also pay interest on the basis of KIBOR. On the income so paid by FBR, the banks will pay tax @35%, which will increase the government revenue.
10. Interest income of Non-resident investor from Government Securities / Bonds:
Presently, the interest rates in Pakistan are significantly higher (eg, Government securities) than the interest rates prevailing in Europe and USA. The withholding tax rate of 10% applicable on payment of interest income to non-resident persons under the said scheme should be brought under the final tax regime to make the scheme from uncertainty and hassle free from local compliance such as filing return of income and assessments by way of audit or otherwise etc, for such non-residents who are keen and ready to invest in Government Securities and bring in precious foreign exchange for investment in Pakistan. This will bring incremental tax revenue to the FBR, as presently the non-resident investors are not investing in Pakistan Government Securities due to the uncertainty of the tax treatment.
Under the existing provision, clause (5A) (Part II) Second Schedule:
" The rate of tax to be deducted under sub-section (2) of section 152, in respect of payments from profit on debt payable to a non-resident person having no permanent establishment in Pakistan, shall be 10% of the gross amount paid".
It is proposed that after the word "gross amount", a proviso should be added to cater for the aforementioned amendment which should be read as follows: "Provided that tax deducted on profit on debt from debt instruments, Government Securities including Treasury bills and Pakistan Investment Bonds shall be final tax on profit on debt payable to a non-resident person having no Permanent Establishment in Pakistan" and the investments are exclusively made through a Special Rupee Convertible Account maintained with a Bank in Pakistan.
Presently, there is zero tax received by the FBR since non-resident investors are not interested in T-Bills and PIBs of GoP due to uncertainty of tax liability in Pakistan. By bringing the tax withholding under the presumptive tax regime, the foreign investors will definitely come to Pakistan in view of prevailing high interest rate (14%) in Pakistan as compared to 0.5% in USA/Europe.
Further, it will also increase the remittance of precious foreign exchange into the country, The Government may offer a scheme to such foreign investors for investment in Pakistan's Bonds market through the already available mechanism of Rupee Convertible Accounts whereby such investors should be allowed to bring foreign exchange in Pakistan and repatriate the same along with the interest income earned in Pakistan.
11. Income of Non-residents from disposal of T-Bills and PIBs before maturity:
Likewise, on the above lines and in order to encourage the foreign exchange inflows into Pakistan, gain arising on disposal of Government Securities (T-bills and PIBs) before maturity to a non-resident person having no PE in Pakistan should be taxed at 10% of the gross amount and the same should be treated as final tax under section 169 read with section 152. After Clause (5B) of Part II of the Second Schedule to the Ordinance, a new Clause (5C) should be inserted for the aforementioned amendment which should be read as follows: The rate of tax to be deducted under sub-section 2 of section 152 in respect of gains arising on disposal of Government securities (T-Bills, PIBs etc) before the date of maturity to a non-resident person having no Permanent Establishment in Pakistan shall be 10% of the gross amount of such gain where the investments are exclusively made through a Special Rupee Convertible Account maintained with a Bank in Pakistan. Provided that the tax deducted @ 10% on such gain shall be Final Tax under section 169 of the Ordinance.
In case of non-deduction of tax on payment to non-residents, due to benefit of double taxation treaties law requires to seek written permission from the tax authorities. Law stipulates that after an application is made by the taxpayer for a nil withholding tax certificate, the tax authorities must respond to it within 30 days of receiving the application. However, tax authorities are extremely reluctant to issue the exemption certificates even after passing the prescribed time limit.
It is proposed that if the Commissioner fails to pass the order for issuance/refusal to issue the exemption certificate, within the prescribed time limit it is to be deemed that exemption has been granted for the payment applied for. In reality, months go by without any response being received and this result in gross delayed payments to service providers situated outside Pakistan, PBA stated.
12. Taxes / duties collected on behalf of the Federal Government:
The association said that the government has enormously widened the scope of collection/ deduction of taxes through banks by making a number of amendments in tax laws through various Finance Acts eg provisions of section 231A & 231AA. The banks incur substantial cost on complying with tax collection provisions as withholding agents on behalf of Government (man-hours, infra-structure use and stationary, just to mention a few). There is no provision in tax laws of any collection charges for rendering these services, making it "forced labour".
On the contrary, the Federal Government retains 2% as collection charges from all the Provincial Governments on General Sales Tax on Services, which it collects on their behalf [see Para 9.6 at page 42 of Explanatory Memorandum on Federal Receipts 2006-2007, published by Government of Pakistan, Finance Division, Islamabad as part of Budget documents presented on June 5, 2006]. If Federal Government is justified to retain 2% as collection charges from Provincial Governments on General Sales Tax on Services, which it collects on their behalf, the same policy should also be allowed to withholding agents, especially banks who collect billions of rupees on behalf of FBR.
The collection and deposit of such taxes involves costs and efforts for which banks are not being compensated unlike in the case of Federal Government collections on behalf of provincial governments. It would be only be fair that banks be compensated for the efforts they are making, it added.
13. Tax on Dividend:
As per Section 101 of the Income Tax Ordinance, 2001 (the Ordinance), Dividend is a Pakistan-source income only if it is paid by a resident Company. However, Section 5 imposes tax on Dividend income on every person who receives a Dividend from a company. The PBA said that the clarification is needed in section 5. This lacuna needs to be removed, since plain reading of Section 5 imposes tax on Dividend Income even if it is paid by a non-resident Company which as per Section 101 is a non-Pakistan-source income.
14. Value of perquisites:
Presently, the Financial Institutions and Banks offer loans including mortgage loans to employees at a mark up rate, which is lower than the market rate. By virtue Section 13(7) the difference between bench mark rate [presently 13% which would increase to 14% w.e.f July 1, 2011] and the actual rate charged to the employees (say 5%) is added back as notional income whilst calculating the taxable salary of such employees.
It is pertinent to mention that in terms of Clause (53A) of Part I of the Second Schedule provide exemptions from addition of any notional income to the salary of employees on account of perquisite received by the employer in following cases:
(i) free or concessional passage provided by transporters including airlines to its employees (including the members of their household and dependents);
(ii) free or subsidised food provided by hotels and restaurants to its employees during duty hours;
(iii) free or subsidised education provided by an educational institution to the children of its employees;
(iv) free or subsidised medical treatment provided by a hospital or a clinic to its employees; and
(v) any other perquisite or benefit for which the employer does not have to bear any marginal cost, as notified by the Central Board of Revenue.
Under the existing law," (7) Where a loan is made, on or after the 1st day of July, 2002, by an employer to an employee and either no profit on loan is payable by the employee or the rate of profit on loan is less than the benchmark rate, the amount chargeable to tax to the employee under the head? Salary for a tax year shall include an amount equal to-
(a) the profit on loan computed at the benchmark rate, where no profit on loan is payable by the employee, or
(b) the difference between the amount of profit on loan paid by the employee in that tax year and the amount of profit on loan computed at the benchmark rate, as the case may be
Provided that this sub-section shall not apply to such benefit arising to an employee due to waiver of interest by such employee on his account with the employer.
It has been proposed that appropriate amendment in the Second schedule is inserted to remove the discrimination between the employees of the bank and employees of other organisation such as Airlines Schools, manufacturing companies etc in respect of taxation of the notional income of the salaried employees. This rationale underlying this proposal is that only mortgage loans will be exempt from the applicability of Section 13(7) of the Ordinance whereas all other concessional loans like auto loans, personal loans will continue to be taxed on the difference between the actual and the bench mark rate.
It will boast the housing industry since in today's economic situation and the presence of speculators in the property market, it is next to impossible for a salaried employee to own a house on commercial mark up rates. Once this industry takes off there will be provision of cheap houses and there will be increase in tax revenue from housing and allied sector. It will contribute in enhancing the national economic activity by extending affordable loans and advances to middle class income group of society. It will remove detrimental financial ramifications due to incremental rate of interest on notional income for all other salaried persons, who are already facing a tough challenge to survive within their paltry resources- all legally declared and tax paid;
(e) The FBR is also cognisant of this fact by stating in Clause (53A) that "any other perquisite or benefit for which the employer does not have to bear any marginal cost; ".
In view of the above it is recommended that Clause (53A) of Part I of the Second Schedule is amended to include mortgage loans advanced by an employer to employees in order to exempt the said perquisites received by an employee by virtue of his employment. Through the Finance Act, 2010 a proviso in clause 13(7) was inserted whereby an employee waiving his interest on the account maintained with the employer is exempted from the above addition of notional income. However, the law is badly worded causing implementation problems.
15. Deductions not allowed:
In view of the high level of Inflation, the limit of Rs 15,000 per month set for the payment of Salary under Clause (m) of the Section 21 needs be increased up to Rs 25,000. Similarly the limit of Rs 50,000/- for a transaction under single account head under Clause (I) should be increased at least up to Rs 150, 000. The limits are required to be enhanced up to Rs 25,000/- for Salary and Rs 150,000 for a transaction under a single transaction respectively.
The PBA has proposed that the limit of Rs 1.5 million imposed under sub- section 13 of the Section 22 of the Ordinance for cost of vehicle is highly unfair and illogical. Ever, increasing prices of vehicles have made it extremely unjustified. It is therefore recommended to remove the said limit of Rs 1.5 million. Due to the inflationary trend in economy there is a need to increase this limit.
16. Section 231-A:
The expression used in section 231-A is "Cash withdrawal" and FBR interprets "encashment" as cash withdrawal. Payments on account of encashment of instruments fall outside the scope of section 231 A and FBR must withdraw any contrary interpretation resorted to in Circular No. 4 of 2005. The expression "cash withdrawal" used in section 231 A cannot be extended to mean "encashment".
17. Diplomat and United Nations exemptions:
Section 42 of the Ordinance deals with "Diplomatic and United Nations exemptions", however all of its clauses cater to the exemptions to the individuals. All the aid agreements entered into with the donor agencies such as the United Nations (UNO, UNICEF, UNCTAD, WFP, UNCHCR, UNDP) US AID, Japan International Co-operation Agency (JICA), Department for International Development (DFID UK), Asian Development Bank etc, Contains a covenant whereby the amounts given under the grant or aid would not be utilised for the purposes of paying direct taxes in the recipient (donee) countries. It is suggested that appropriate amendments be made in section 42 of the Ordinance to specifically exempt such international development agencies from the application of income tax laws. This will remove any ambiguity and doubt regarding taxability of income tax and withholding taxes on such organisations.
18. Federal Government, Provincial Government and Local Government:
Sub-section (4) of this Section should be appropriately amended to exclude the Defence Housing Authorities (DHA), Cantonment Boards and similar bodies rendering them outside the definition of Government to remove any ambiguity faced by the withholding agent. Under the existing law, 49 Federal Government, Provincial Government, and Local Government income. -
(1) The income of the Federal Government shall be exempt from tax under this Ordinance.
(2) The income of a Provincial Government or a Local Government in Pakistan shall be exempt from tax under this Ordinance, other than income chargeable under the head? Income from Business derived by a Provincial Government or Local Government from a business carried on outside its jurisdictional area.
The PBA has proposed specific exclusion of Defence Housing Authorities (DHA), Cantonment Boards and similar bodies from the said section. It will remove any ambiguity faced by the withholding tax agent.
19. Foreign Losses:
According to section 104(2) 'the foreign losses' are to be carried forward to the following tax year and set off against the foreign source income chargeable to tax under that head in that year. As a result foreign loss sustained by resident taxpayer is not adjustable against the local income, which is un-realistic and against the concept of taxing global income. In the repealed Income Tax Ordinance, 1979 there was no such restriction and foreign losses sustained by a resident could be set off against local income.
Under the existing law, " (2) If the total deductible expenditures referred to in sub-section (1) exceed the total foreign source income for a tax year chargeable to tax under a head of income (hereinafter referred to as a? foreign loss), the foreign loss shall be carried forward to the following tax year and set off against the foreign source income chargeable to tax under that head in that year, and so on, but no foreign loss shall be carried forward to more than six tax years immediately succeeding the tax year for which the loss was computed.
The proposed provision said that the restriction of set off of foreign losses against subsequent foreign income needs to be removed to effectively reinstate the concept of taxing global income.
20. Due date for payment of tax:
Finance Act, 2009 has unreasonably decreased the numbers of days specified for making payment into Government treasury to 15 days. It is suggested that the original time of 30 days should be restored to remove the hardship faced by the business community and taxpayers. Further, in case of disputed tax liability, the tax payer should have the right to file appeal without the additional tax or alternatively, department should pay compensation if the demand created by assessing officer would proved to be illegitimate when tested at appellate level.
Under the present law, " Where any tax is payable under an assessment order or an amended assessment order or any other order issued by the Commissioner under this Ordinance, a notice shall be served upon the taxpayer in the prescribed form specifying the amount payable and thereupon the sum so specified shall be paid within fifteen days from the date of service of the notice".
It is proposed that the word fifteen should be replaced with the word thirty. This is essential in order to remove the culture of creating unfair demands and unjustified liabilities by the assessing officers. This will eliminate the short-sighted approach adopted by Federal Board of Revenue in meeting their tax collection targets. Such approach has caused irrecoverable loss on business confidence building measured adopted by the Pakistan Government during last decade.
It is proposed to either withdraw the condition that advance tax payments should be at least 90 per cent of the tax liability for the tax year, or reduce the same to 75 per cent.
It is proposed that in order to remain internationally and regionally competitive, the Government of Pakistan should decrease its effective corporate income tax rate to at least 30 per cent.
Staff pension and gratuity funds should also be exempted from the incidence of Zakat, like Employee Provident Fund, under the Zakat and Ushr Ordinance, 1980.
Non-salaried persons should also be allowed to claim marginal relief where the income marginally exceeds from a particular slab of income and thereon.