Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • FBR allows monthly salary up to Rs25,000 paid in cash as business expense

    FBR allows monthly salary up to Rs25,000 paid in cash as business expense

    ISLAMABAD: Federal Board of Revenue (FBR) has allowed monthly salary up to Rs25,000 per employee paid in cash as business expense after amendment made to Income Tax Ordinance, 2001.

    The FBR on Thursday issued Income Tax Circular No. 03 to explain changes made to Income Tax Ordinance, 2001 through Finance Act, 2020.

    The FBR said that section 21(m) of the Ordinance previously disallowed expenditure on account of monthly salary against business income if it was paid in excess of threshold of Rs 15,000 per month per employee and payment was made otherwise than through crossed cheque or direct transfer of funds to the employees bank account.

    The FBR said that the Finance Act, 2020, had increased this threshold to Rs25,000 per month per employee for payment of salary otherwise than through crossed cheque or direct transfer of funds to the employees bank account.

    The FBR further explained that Section 21(l) of the Ordinance does not allow deduction against business income if claim of a business expenditure exceeds Rs50,000/- under a single account head in aggregate and payment is made otherwise than through crossed banking instrument, online transfer of payment or credit card from business account of the taxpayer.

    However, this inadmissibility of deduction did not apply if a single transaction on account of such business expenditure remained at Rs. 10,000/- or below.

    “Finance Act, 2020 has increased these thresholds from Rs. 50,000 to Rs. 250,000/- and from Rs.10,000/- to 25,000/-respectively,” the FBR added.

    However, the FBR said that expenditure on account of utility bills is allowed against business income under section 20 of the Ordinance.

    “A new clause (p) has been added to Section 21 to disallow it if it is incurred in excess of certain limits and is in violation of certain conditions as may be prescribed by the FBR,” It added.

  • Filing income tax return mandatory for FTR taxpayers: FBR

    Filing income tax return mandatory for FTR taxpayers: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) has said that filing annual income tax return is mandatory for taxpayers falling under final tax regime (FTR).

    The FBR on Thursday issued Income Tax Circular No. 03 of 2020 to explain major changes to Income Tax Ordinance, 2001 through Finance Act, 2020.

    The FBR said that prior to the Finance Act, 2020 persons subject to the final tax regime were obliged to file statement of final taxation under section 115(4) of the Ordinance.

    This section has now been omitted since final tax regime has been phased out for most of the transactions.

    “However, any person whose income is still subject to final tax regime, is now obligated to file normal income tax return and allied documents under the newly inserted clause (ae) in sub-section (1) of section 114 of the Ordinance,” the FBR said.

    The FBR further added that an enabling provision has also been inserted in clause (a) of sub-section (2) of section 114 of the Ordinance whereby the Board had been empowered to prescribe different returns for different classes of income or persons including persons subject to final taxation.

  • Foreign exchange reserves increase to $19.84 billion

    Foreign exchange reserves increase to $19.84 billion

    KARACHI: The liquid foreign exchange of the country has increased by $121 million to $19.843 billion by week ended August 28, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves were at $19.722 billion by week ended August 21.2020.

    The official foreign exchange reserves of the SBP increased by $72 million to $12.713 billion by week ended August 28, 2020 as compared with $12.641 billion a week ago.

    Similarly, the foreign exchange reserves held by commercial banks also increased by $49 million to $7.13 billion by week ended August 28, 2020 as compared with $7.081 billion a week ago.

  • KCCI rejects electricity tariff hike, demands immediate withdrawal

    KCCI rejects electricity tariff hike, demands immediate withdrawal

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has rejected the recent hike in electricity tariff and termed it disaster for the industry.

    The chamber also demanded the government to immediate withdraw the increase in electricity tariff.

    KCCI President Agha Shahab Ahmed Khan in a statement on Thursday said that the announcement of increase in rates of electricity ranging from Rs.1.09 to Rs.2.89 has come as a shock to the industries based in Karachi.

    “This is yet another blow to the trade and industry which is already suffering from losses as a result of lockdowns during Covid-19 pandemic and again due to devastating rainfalls in the city which has caused losses in billions of rupees,” he added.

    He urged Advisor to Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh to immediately withdraw this unjust and ill-timed hike in electricity tariff which would further aggravate the hardships for Karachiites who are struggling really hard to recover from devastating impact of coronavirus pandemic and subsequently the massive damage to their assets including buildings, warehouses, machinery and materials.

    The damage is yet to be assessed when the water is cleared and some normalcy is restored.

    He pointed out that ECC and higher authorities have shown utter disregard for the miseries and losses suffered by people of Karachi, by approving yet another electricity tariff hike because ECC had already imposed a tariff increase in July this year by Rs2.89 per with immediate effect.

    Before the industrial, commercial and residential consumers could absorb the tariff hike in July’ 2020, yet another increase was approved to further squeeze the consumers in a calamity hit city.

    “Indeed it is a huge disappointment that the Federal Government, instead of providing relief to the already burdened citizens of Karachi during the ongoing difficult times, continues to take anti-business and anti-Karachi actions.

    “It is well known fact that the economic hub of Pakistan today is passing through worst possible crisis and suffering due to a crumbling infrastructure, lockdowns and urban flooding due to the heaviest rainfall in 90 year history”, he added.

    On the one hand, the Prime Minister and Army Chief have shown their resolve to rescue the city of Karachi from complete destruction and economic fallout of natural as well as man-made disasters, while the ECC and honorable Advisors are taking decisions which are contrary to the commitments made by the Prime Minister and COAS, he opined.

  • Stock market gains 353 points on expected Karachi package announcement

    Stock market gains 353 points on expected Karachi package announcement

    KARACHI: The stock market witnessed an increase of 353 points on Thursday as positive sentiments prevailed over expected package to be announced by the prime minister during his Karachi visit.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 42,188 points as against 41,835 points showing an increase of +353 points.

    Analysts at Arif Habib Limited said that after posting one the recent high volumes on the bourse with 837 million shares, the market stepped up to clinch 917 million today, yet another high.

    Investor sentiment has been sky high in recent times, especially on the expectation of an announcement by Prime Minister on his scheduled visit to Karachi on September 04, 2020.

    Infrastructure development is expected to positively impact construction sector scrips, which prompted Investors to take interest in Cement and Steel sectors.

    MLCF and PIOC also hit upper circuits on the notification of substantial shareholding by sponsors.

    Among banking sector stocks, NBP continued the uptrend after posting an outstanding result yesterday.

    Banking sector stocks topped the volumes with 123.8 million shares, followed by Cement (112 million) and Technology (93.3 million). Among scrips, UNITY posted 51.2 million shares, followed by BOP (49.7 million) and KEL (41.8 million).

    Sectors contributing to the performance include Cement (+89 points), Banks (+51 points), O&GMCs (+44 points), Textile (+41 points) and Fertilizer (+35 points).

    Volumes increased further from 837 million shares to 919.4 million shares (+10 percent DoD). Average traded value also increased by 1 percent to reach US$ 159.9 million as against US$ 157.6 million.

    Stocks that contributed significantly to the volumes include UNITY, BOP, KEL, MLCF and HASCOL, which formed 24 percent of total volumes.

    Stocks that contributed positively to the index include MLCF (+31 points), SYS (+29 points), KTML (+22 points), NBP (+21 points) and PIOC (+19 points).

    Stocks that contributed negatively include HUBC (-25 points), BAHL (-13 points), POL (-8 points), OGDC (-6 points) and DAWH (-5 points).

  • Rupee falls by 44 paisas on import payment demand

    Rupee falls by 44 paisas on import payment demand

    KARACHI: The Pak Rupee fell by 44 paisas against dollar on Thursday owing to demand for import and corporate payments, dealers said.

    The rupee ended Rs166.04 to the dollar from previous day’s closing of Rs165.60 in interbank foreign exchange market.

    Currency experts said that higher demand for import and corporate payments depreciated the rupee value.

    They said that the economic activities had been normalized after lifting the lockdown. The domestic industry requires imported raw material, they added.

    They, however, said that the rupee may recover in coming days owing to improved indicators especially surplus current account and narrowed trade deficit.

  • Tax return form not finalized so far as less than a month for deadline

    Tax return form not finalized so far as less than a month for deadline

    ISLAMABAD: Federal Board of Revenue (FBR) has yet to finalize income tax return form for tax year 2020 as less than one month is remaining for return filing due date.

    The due date for filing income tax returns is September 30, 2020 for tax year 2020. By this date salaried persons, Association of Persons (AOPs) and companies falling under special financial year are required to file their annual income tax returns.

    As per interpretation of tax experts the FBR should issue the tax return form on July 01 every year to give taxpayers three-month time to file their returns.

    This year, as usual, the FBR has already delayed two months in issuing the final draft of income tax return form. This delay may result in extension in time for filing the annual return.

    The FBR on August 19, 2020 issued draft income tax return form for tax year 2020 for taking input from stakeholders to finalize the return form. So far the FBR is failed to finalize the return despite lapse of around half a month.

    The FBR invited comments on the draft income tax return form within seven days from the date of issuance of SRO 745(I)/2020.

    It is pertinent to mention that the FBR is estimating half a million income tax return during next couple of years. Tax experts said that timely issuance of return form may help the FBR to achieve its desired number of return filers.

  • Project launched to promote tax culture through educational institutions

    Project launched to promote tax culture through educational institutions

    ISLAMABAD: Federal Board of Revenue (FBR) and Federal Directorate of Education (FDE) have signed a agreement to promote tax culture in the country through educational institutions.

    A special signing ceremony of Letter of Understanding (LoU) between FDE and FBR held on Wednesday in Ministry of Federal Education and Professional Training Islamabad.

    Ceremony was observed by Federal Minister Shafqat Mahmood, Parliamentary Secretary Wajija Akram Khan, Chairman FBR Javed Ghani, Federal Secretary Farah Hamid Khan, Additional Secretary Mohyuddin Ahmed Wani, Director General Federal Directorate of Education, Zia Batool and senior officers of the FBR.

    The LoU is aimed to promote tax culture and tax awareness in all educational institutions of Federal Directorate of Education.

    It shall serve to define and detail the terms & conditions to foster positive taxation culture serve and awareness among students and teachers through different sets of activities, skills and experiential learning for making them responsible citizen.

    Federal Board of Revenue will educate and train two hundred twenty thousand students & seven thousands & five hundred teachers through taxation syllabus, training sessions and seminars.

    Federal Board of Revenue (FBR) shall provide experiential learning opportunities, on and off campus for personal and professional development of the students and Teachers.

    Federal Board of Revenue is prime institution of the country which collects tax from businesses and individuals, scrutinize tax crimes and money laundering by applying highest standards of courtesy, integrity and professionalism.

    Federal Directorate of Education shall arrange tax awareness campaigns and walks in coming months all over the Islamabad capital territory.

    Federal Minister Shafqat Mahmood applauded the initiative and urged the provinces to follow this practice. Federal Education Minister has stated, we are introducing such reforms through syllabus for students and teachers, which have never been observed in the history of the country, before.

    The project will ensure improved personal and professional knowledge, attitude and skills of the students & teachers through core values of respect for law, the life and property of self and others by strictly following the Federal Board of Revenue.

    LoU was inked by Director General Federal Directorate of Education (FDE) Zia Batool and Chief (FATE) Federal Board of Revenue Ayesha Farooq.

  • Share market gains 458 points as activities seen in blue chips

    Share market gains 458 points as activities seen in blue chips

    KARACHI: The share market witnessed an increase of 458 points on Wednesday owing to trading activities were seen banking and other blue-chip stocks.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 41,834 points as against 41,378 points showing an increase of 458 points.

    Analysts at Arif Habib Limited said that the market continued the bull run to post a total gain of 556 points during the session, closing the session +458 points.

    Brisk trading activity was witnessed, which saw NBP trading at upper circuit after posting better than expected financial results at the opening bell.

    Cement, Fertilizer, OMCs and Chemical sector stocks followed this performance and traded high volumes.

    Overall trading volumes also reached a recent time high of 836 million shares. Technology sector led the volumes with 114.5 million shares, followed by Cement (86.9 million) and Banks (81.3 million). Among scrips, KEL topped the volumes with 53.9 million, followed by PTC (48.7 million) and PBTL (46.9 million).

    Sectors contributing to the performance include Banks (+90 points), Fertilizer (+81 points), O&GMCs (+49 points), Inv Banks (+39 points) and Cement (+35 points).

    Volumes increased from 759.3 million shares to 837.0 million (+10 percent DoD). Average traded value also increased by 21 percent to reach US$ 158.1 million as against US$ 131.2 million.

    Stocks that contributed significantly to the volumes include KEL, PTC, PIBTL, HASCOL and TRG, which formed 28 percent of total volumes.

    Stocks that contributed positively to the index include ENGRO (+38 points), UBL (+34 points), NBP (+31 points), DAWH (+28 points) and EFERT (+26 points). Stocks that contributed negatively include HUBC (-13 points), SHFA (-4 points), MEBL (-3 points), FCEPL (-3 points) and HINOON (-2 points).

  • Rupee gains three paisas on improved sentiments

    Rupee gains three paisas on improved sentiments

    KARACHI: The Pak Rupee gained three paisas against dollar on Wednesday owing to improved sentiments on economic indicators, analysts said.

    The rupee ended Rs165.60 to the dollar from previous day’s closing of Rs165.63 in interbank foreign exchange market, according to data released by State Bank of Pakistan.

    The rupee appreciated by Rs2.83 against the dollar since August 26, 2020.

    Currency experts said that the rupee had recovered against the greenback owing to improved economic indicators including surplus current account, narrowed trade deficit and improved foreign exchange reserves.

    The experts said that the local unit would further gain in coming days owing to inflows of foreign remittances and export receipts.

    However, they said that demand for import payments after normalization of coronavirus impact could increase dollar demand.