KARACHI: The Federal Board of Revenue (FBR) has been proposed to increase the turnover from one million rupees to 10 million rupees for individuals to made advance payment.
Karachi Tax Bar Association (KTBA) in its proposals for budget 2022/2023, stated that Section 147 of the Income Tax Ordinance, 2001 relates to quarterly payment of advance tax.
READ MORE: Eliminating commissioner audit selection power sought
The subsection 6 entitles a taxpayer to file a lower estimate. Vide Finance Act 2018 condition has been added that the lower estimate be accompanied with prescribed details.
Subsection 4A as substituted vide Finance Act 2015 states that the taxpayer shall estimate the tax payable for the tax year, by the second installment due date and if the tax payable is likely to be more than the amount payable under sub-section (4), the taxpayer shall furnish an estimate of the amount of tax payable and discharge fifty per cent by the second quarter installment. The remaining fifty per cent to be discharged by the due date of the third and fourth quarter of the tax year.
READ MORE: Threshold be doubled for domestic electric consumers
The requirement of quarterly payment of advance tax is comfortable for the companies and AOPs as they are regularly operated entities. While the condition of income more than one million for the individual cause workload for the registered individuals to face notices and quarterly compliance of advance tax. Unease of doing business and rigorous compliance requirement.
The requirements to file prescribed details along with the lower estimate is against the scheme of deemed assessment and concurrent legislation as well since the section 205 mandates the taxpayer to discharge ninety percent of the tax liability by way of advance tax.
READ MORE: Genuine NPOs unable to get benefit of 100% tax credit
“The amendment shall be made in the threshold of one million rupees. It should be increased to ten million,” it is recommended.
Sub-section147(4A) may be restored to the position prior to amendment vide Finance Act 2015 requiring taxpayers to file an estimate of higher side. While the ultimate objective of section 147 is to discharge tax liability of 90 percent this is well achieved vide pre-amended position with check as per section 205 of the Ordinance.
READ MORE: Changes sought in withholding on non-resident payment
The requirements under subsection 6 as inserted vide Finance Act 2018 tantamount to disturbing the concept of deemed assessment and should be deleted.
Giving rationale, the KTBA said this will save individuals from cost burdens of quarterly compliance And decrease the workload of individual tax-payers.
