What Are The Accumulated Profits, Appellate Tribunal And Approved Gratuity?

The accumulated profit means that any reserves maintained by a business out of its profits. All profits of the company including income of a trust up to the date these are distributed. These profits kept in whatever shape, whether capitalized or not will be treated as accumulated profits until the distribution to shareholders.

Appellate Tribunal: In case of any dispute between the taxpayers and tax department, an appeal can be made to Appellate Tribunal. This is the highest judicial authority in the matters of tax. It consists of judicial as well as accountant members. The members are appointed by federal government. The decision of the tribunal on point of facts is final. However, in case of point of law the matter may be referred to high court.

Approved Gratuity Fund: The government and private organization maintain gratuity funds for the benefit of their employees. The amounts in these funds continue to accumulate from year to year and normally are paid to employees at the time of retirement. In case of death of an employee during service, the amount is paid to his family. The employer gets many benefits if the gratuity fund is approved to the income tax authorities. Under the income tax ordinance 2001, the commissioner of income tax grants such an approval.