Banks to provide information of all recipients of profit on debt

KARACHI: The Federal Board of Revenue (FBR) to ask banks to provide information of all persons receiving profit on debt from July 01, 2020.

To implement this an amendment has been introduced through Finance Bill 2020.

According to explanation of the Finance Bill 2020 by EY Ford Rhodes Chartered Accountants, the Finance Act, 2013, introduced a separate section requiring banking companies to furnish information about the banking transactions of their customers to the tax authorities.

The law provides an overriding effect to the Protection of Economic Reforms Act, 1992, the Banking Companies Ordinance, 1962, the Foreign Exchange Regulation Act, 1947, and the regulations made under the State Bank of Pakistan Act, 1956.

Apart from seeking particulars of deposits and card transactions, the law also introduced a requirement through the Finance Supplementary (Amendment) Act, 2018 to provide a list of persons who received profit on debt in excess of Rs500,000 during the preceding financial year.

The Finance Bill 2020 proposed to eliminate the limit of Rs500,000, thereby making it mandatory for banking companies to furnish a list of all persons receiving profit on debt.

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