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Hello, i understood that personal pension scheme is only used in arriving at Adjusted net income for Personal Allowance working.
I want to ask that, is personal pension taken into consideration in anyway in calculation of tax payable? (after tax liability )and
In the notes it says Occupation pension contribution is shown as a deduction from salary in Income tax computation. But is salary part of income tax computation? I thought employment income is stated in Income tax computation Proforma. while Salary is part of employment income in which we deduct Allowable deductions and add Taxable benefits.
Kindly explain If Occupation pension scheme will be listed in ITC with salary or shown in separate working of Employment income 🙂 Thanks.
The gross amount of Personal Pension Contributions (PPC) (paid x 100/80) are indeed deducted in computing Adjusted Net Income to establish any restriction in the Personal Allowance but are NOT deducted anywhere on the IT computation including the calculation if IT Payable. The gross amount of the PPC however does increase both the basic and higher rate band limits to allow higher rate and additional rate relief to taxpayers!
Occupational pension contributions paid by employee are deducted from salary in establishing Employment Income assessment and may be shown as a working or on the face of the IT comp.
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