2014417124311383 Obligation to File in Come Tax Declaration

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Obligation to fileIncome Tax

Declarations

TAXPAYERS FACILITATION GUIDEBrochureIR-IT-02 / UpdatedApril, 2014Revenue DivisionFederal Board of RevenueGovernment of Pakistan

[email protected], 051-111-227-227www.fbr.gov.pk
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Brochure IR-IT-02 Obligation To File Income Tax Declarations

Our VisionTo be a modern, progressive, effective, autonomous and

credible organization for optimizing revenue by providing

quality service and promoting compliance with tax andrelated laws

Our MissionEnhance the capability of the tax system to collect due

taxes through application of modern techniques,providing taxpayer assistance and by creating a

motivated, satisfied, dedicated and professionalworkforce

Our ValuesIntegrity

ProfessionalismTeamwork

CourtesyFairnessTransparencyesponsiveness

For assistance and information on tax mattersPlease contact our help line center through

Toll Free Telephone 0800-00-227 and following numbers:Telephone 051-111-227-227 or 051-111-227-228

Fax [email protected]

orVisit our tax facilitation center (located in all major cities) or any Regional Tax Office

orVisit our website atwww.fbr.gov.pk
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Facilitation and TaxpayersEducation Wing (FATE)

Brochure IR-IT-02 updated June, 2013 Obligation to File Income Tax Declarations

Federal Board of RevenueRevenue DivisionGovernment of Pakistan

BrochureIR-IT-02UpdatedApril, 2014

Introduction

This brochure provides generalinformation about taxpayers for filingincome tax obligations ofdeclarations (return of income andstatement of final/fixed tax).

We have used simple language toexplain most common tax situations.If you need more help after readingthis brochure, feel free to contact usfor further details andinformation.

This brochure is to assist the taxpayers and ref lects the

legal posi t ion at the t ime of pr int ing. In case of any

conf l ic t ,the legal provis ions of the law shal l prevai l over

the contents of this brochure.

Comments and suggestionsWe welcome your comments about this

brochure and your suggestions for futureeditions.You can e-mail us [email protected]

orYou can write to us at the following address:

Member, Facilitation And TaxpayersEducation,

Federal Board of Revenue,Constitution Avenue,

Islamabad

Contents Page

What is Return of Income 2

What is Return of Income 2

Obligation to file income tax declarations 2

Who is required to furnish the return ofincome?

2

Who is required to furnish the statementof final/fixed tax?

3

What is the due date? 3

Where to furnish? 3

Is it mandatory to furnish electronically? 3

What penalties and default surcharge arecharged from non-filers, late-filers orshort-filers?

4

Can penalty for non-filing or late filing beavoided?

4

What if an omission or wrong statementis discovered later?

4

In case of refund what is required to bedone?

5

Definitions 5

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Brochure IR-IT-02 updated November, 2012 Obligation to File Income Tax Declarations

What is a Return of Income

The Return of Income is a Form filed by aperson to the Income Tax Department. Itcontains details of the persons annual

income(s).

Obligation to file income taxdeclarations

Who is required to submit a return ofincome?

1. Every company irrespective of anyconditions, whether earning exemptincome, or still in start-up stage or anyother situation;

2. Associat ions of persons and individualswith annual income over Rs. 400,000/- fortax year 2013.

Any person who is charged to tax inany of the two preceding tax years

Any person who claims a loss to becarried forward and set-off against theincome of the following year(s).

3. Any person whoowns immovable property:

i. with land area of 250 sq. yards or morelocated in areas falling within themun ic ipa l limi ts, a Cantonment Board,or the Islamabad Capital Territory;

ii. with land area of 500 sq. yards or morelocated in rating area; or

iii. a flat located in areas falling within themun ic ipa l limi ts, a Cantonment Board,or the Islamabad Capital Territory; or

iv. a flat with covered area of 2,000 sq. feetor more located in rating areas;

4. any person who owns a motor vehiclehaving engine capacity of 1,000 cc or more

5. any person who has obtained a National TaxNumber; or

6. any person who is the holder of commercialor industrial connection of electricity where

the amount of annual bill exceeds Rs.1,000,000.

7. Non p rof i t organizat ions, irrespective ofany conditions;

8. Any welfare institution approved underClause (58) of Part I of the SecondSchedule to the Income Tax Ordinance,2001, irrespective of any conditions.

Every individual whose income under thehead Income from business exceeds Rs.300,000 but does not exceed the maximumamount that is not c hargeable to tax.

Any person [who in the opinion of theCommissioner was required to furnish thereturn of income (for any of the aforesaidreasons) but has failed to do so] to whom anotice for furnishing of the return of incomehas been served by the Commissioner.

Even if none of the above applies, one may stillneed to file a return in order to claim a refund oftax deducted or collected at source (other thanfinal tax).

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Who is not required to file I.TReturn?

Exceptions (not required to file return ofincome) to the above are as under:

Deriving income exclusively from salaryupto Rs. 499,999 (The annual statement ofdeduction of income tax from salary, filed bythe employer is treated as return of incomeon behalf of such employee);

Entire income is subject to final tax or fixedtax for which a separate statement isprescribed;

A widow, an orphan below the age of 25years or a disabled person solely for the

reason of owning immovable property (a flator land of 250 sq. yards or more) located inareas falling within the municipal limits*, aCantonment Board, or the Islamabad CapitalTerritory; and

A non-resident for the reason of owningimmovable property;

DefinitionMunicipal limits means areas existingimmediately before the commencement of localgovernment laws in the provinces.DefinitionNon-profit organization means any personother than an individual which is:

Established for religious, educational,charitable, welfare or developmentpurposes, or for the promotion of anamateur sport;

Formed and registered under any law as anon-profit organization;

Approved by the commissioner of incometax; as a NPO andNone of the assets of such person confers,or may confer, a private benefit to any otherperson;

Maximum amount that is not chargeable totax for the tax year 2013 is Rs. 400,000 oftaxable incom ederived from all sources takentogether.

Who is required to furnish the statement offinal/fixed tax?

Any person deriving income sub ject to aseparate charge, income su bject to f ina ltax or separate block of incom e [Pleaseread our brochure Income subject toSeparate Charge, Final Tax, and FixedTax Regimes of Income Tax]

Any person [who in the opinion of theCommissioner was required to furnish thestatement of final/fixed tax but has failed todo so] to whom a notice for furnishing of thestatement of final/fixed tax has been servedby the Commissioner.

What is the due date for furnishing the returnof income and/or statement of final/fixed tax?

The due dates for furnishing the return ofincome and/or statement of final/fixed tax for are

as under:

Due date

In case of a company (Bothfor return of income and/orstatement of final/fixed tax):

Whose tax year endsbetween 1

stJuly and 31

st

December

30tSeptember *

Whose tax year endsbetween 1

st January and

30thJune

31stDecember *

In case of salaried individual(Both for return of incomeand/or statement of final/fixedtax only)

31stAugust *

In case of other individual andassociat ion of persons

Required to furnishstatement of final/fixedtax only

31stAugust *

Required to furnishstatement of final/fixed

tax and return of income

30thSeptember *

Required to furnish returnof income only

30tSeptember *

* next following the end of tax year

Where to furnish the return of income and/orstatement of final/fixed tax?

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Hard copies (printed forms)of the return ofincome and/or statement of final/fixed taxcan be furnished:

o By post or courier service; or

o Delivery by hand;

to the Tax Facilitation Center of therespective Large Taxpayer Unit or RegionalTax Office having jurisdiction over ataxpayer where electronic fi l ing of returnof incom e and/or statement of final /f ixed

tax is not mandatory.

Soft copies (electronic filling)of the returnof income and/or statement of final/fixed taxare required to be furnished through FederalBoard of Revenue web portal(www.e.fbr.gov.pk).

Is it mandatory to furnish the return ofincome and/or statement of final/fixed taxelectronically?

Electronic filing of return of income and/orstatement of final/fixed tax is mandatory for thefollowing:

A company;

An Asso ciat ion of Persons; and

An individual registered under the Sales TaxAct, 1990

An individual deriving income from salary ofRs. 500,000 or more.

For further information on the procedure for e-filing please visit FBRs web portalwww.e.fbr.gov.pk

What penalties and default surcharge arecharged from non-filers, late-filers or short-filers?

Non-filers or late-filers attract a penaltyequal to 0.1% of the tax payable for each

day of default subject to a minimum penaltyof Rs. 5,000 and a maximum penalty of 25%of the tax payable;

Non-filers, late-filers or short-filers owing atax payable on the due date of furnishing thereturn of income and/or statement offinal/fixed tax also attract Default Surcharge(interest) at the rate of KIBOR plus 3% perquarter; and

Where a return of income and/or statementof final tax are required to be furnished incompliance to a notice served by theCommissioner, the non-filers and late filerscommit an offence punishable on conviction

with a fine or imprisonment for a term notexceeding one year or both.

Can penalty for non-filing or late filing beavoided?

Penalty for non-filing or late filing can be avoidedby taking extension in time for furnishing thereturn of income and/or statement of final/fixedtax from the Commissioner.

For this purpose application in writing, by thedue date, has to be made to the Commissionerspecifying the reasons for inability to furnish the

return of income and/or statement of final/fixedtax by the due date.

If the Commissioner is satisfied that because ofthe absence from Pakistan, sickness of thetaxpayer, any misadventure or any otherreasonable cause, the taxpayer is unable tofurnish the return of income and/or statement offinal/fixed tax on the due date, theCommissioner is empowered to allow extensionfor furnishing the return of income and/orstatement of final/fixed tax upto 15 days and inexceptional circumstances for a longer period.

What if an omission or wrong statement isdiscovered later in the return of incomeand/or statement of final/fixed tax?

A return of income and/or statement of final/fixedtax can be revised to correct any omission orwrong statement discovered later on, within 5years from the end of the financial year in whichthe return of income and/or statement of

final/fixed tax was originally furnished.

The revised return of income and/or statementof final/fixed have to be accompanied withrevised accounts or revised audited accountsand the reasons for such revision.

Furnishing of revised return of income and/orstatement of final tax does not absolve a personfrom payment of default surcharge.

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In case of refund what is required to bedone?

If computation of tax results in a refund, youare required to submit a separate application

for claim of refund in the prescribed formwith the return of income and/or statementof final tax.

The refund can also be claimed later on(after you have submitted your tax returns)but within two years from the date ofassessment (date of filling of return etc.) orfrom the date on which the tax was paid,which ever is later.

Definitions

Following terms used in this brochure are

explained in our brochure Basic Concepts ofTax on Income:

Company

Associations of persons

Taxable income

Tax year

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Facilitation and Taxpayer Education Material available on ourwebsitewww.fbr.gov.pk

Income Tax:

Income Tax Ordinance, 2001;

Income Tax Rules, 2002;

Income Tax Notifications (SROs issued by the Federal Government);Income Tax Circulars (Clarifications issued by the Federal Board of Revenue);

Income Tax Forms (Registration form, return forms, withholding tax statements, tax deposit form);

Computer Software (Withholding tax statements);

Avoidance of Double Tax Treaties with other countries;

Publications and brochures

Sales Tax

Sales Tax Act, 1990;

Sales Tax Rules, 2006;

Sales Tax Special Procedure Rules, 2007;

Sales Tax Special Procedure (Withholding) Rules, 2007

Sales Tax Notifications (SROs issued by the Federal Government);

Sales Tax General Orders;Sales Tax Circulars/Rulings (Clarifications issued by the Federal Board of Revenue);

Sales Tax Forms (Registration form, return forms, tax deposit form);

Computer Software (Refund claim);


Federal Excise Duty

Federal Excise Act, 2005;

Federal Excise Rules, 2005;

Federal Excise Notifications (SROs issued by the Federal Government);

Federal Excise General Orders;

Federal Excise Circulars/Rulings (Clarifications issued by the Federal Board of Revenue);

Federal Excise Forms (Return forms);


On line information services:

Registration (Income Tax, Sales Tax and Federal Excise Duty);

Registration Application Status (Income Tax and Sales Tax);

Registered Taxpayers Verification (Income Tax and Sales Tax);

Active taxpayers list;

F A T EFacilitation and Tax Education

is the key to Voluntary Complianceand

Voluntary Compliance is the key toBetter Revenues
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2014417124311383 Obligation to File in Come Tax Declaration

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