ISLAMABAD: Federal Board of Revenue (FBR) on Monday issued new instructions to its tax offices for extension in filing income tax returns in special cases.

The new instructions have disappointed tax consultants, practitioners and business community, who approached the FBR with request to extend the last date for filing income tax return beyond December 08, 2020.

As only one day is left for filing income tax return for tax year 2020 the FBR issued instructions to field offices to facilitate taxpayers in granting date extension provided that requests are filed with genuine reasons for non-compliance by due date.

The FBR has already made it clear that it would not further extend the last date for filing income tax return beyond December 08, 2020 as statutory time of 90 days granted to taxpayers for making compliance.

It is worth mentioning that Pakistan Tax Bar Association (PTBA) in its letter on December 02, 2020 urged the FBR to extend the last date up to January 31, 2020 due to multiple reasons. The primary reasons identified by the tax bar was miscalculation in tax rate for different taxpayers.

Further, it also identified the extraordinary situation due to coronavirus which restricted workforce to half besides halting the working activities due to lockdown imposed in various parts of the country.

However, the FBR on Monday issued instructions to all the field offices regarding manual receipt of applications for extension to file income tax return for tax year 2020.

The FBR again clearly mentioned that it would not further extend the date for filing income tax returns for tax year 2020. However, as per the new instructions application may be filed manually to commissioner Inland Revenue covering many taxpayers for extension in date for filing tax returns.

The FBR directed the tax offices:

(i) That, every Inland Revenue field formation would establish a help desk to receive manual requests for extension;

(ii) That, one request for extension addressed to chief commissioner Inland Revenue concerned could cover multiple taxpayers provide it contains taxpayers’ name; CNIC.NTN and identification of jurisdiction.

(iii) That the option for filing online request for extension would also be available and can be availed to the maximum degree; and

(iv) That, extension would be granted generously to the extent possible.

The FBR further directed the chief commissioner to ensure proper receipt of all requests, grant of extension, and report the number of requests received, and the extension granted by December 10, 2020.

ISLAMABAD – Under the Income Tax Ordinance, 2001, there are specific categories of persons who are not required to file an annual income tax return, as clarified in Section 115 of the law. This provision offers relief to certain individuals based on humanitarian, age-related, or residency grounds.

ISLAMABAD: Taxpayers, who are unable to file income tax return and wealth statement by due date, are entitled to get date extension under tax laws by submitting application with genuine reasons.

The Federal Board of Revenue (FBR) a day earlier issued instructions to all the chief commissioners of Inland Revenue that it would not extend the date for filing income tax return and wealth statement beyond December 08, 2020.

However, on the other hand tax bars and taxpayers are highlighting pressing issues such as calculation errors and many others on the IRIS portal making it difficult for filing income tax returns.

Since only three days are left for the last date for filing income tax return for tax year 2018 i.e. December 08, 2020, and the FBR so far is not showing flexibility, those taxpayers, who believe they would not able to comply with the due date, should prepare themselves for submitting applications to concerned Commissioner IR to seek date extension.

Section 119 of the Income Tax Ordinance, 2001 allows taxpayers to file an application with logical reasons to get date extension for filing income tax return and wealth statement.

The Section 119 of the Ordinance is reproduced below:

Section 119: Extension of time for furnishing returns and other documents

(1) A person required to furnish —

(a) a return of income under section 114 or 117;

(d) a wealth statement under section 116,

may apply, in writing, to the Commissioner for an extension of time to furnish the return, or statement, as the case may be.

(2) An application under sub-section (1) shall be made by the due date for furnishing the return of income, or statement to which the application relates.

(3) Where an application has been made under sub-section (1) and the Commissioner is satisfied that the applicant is unable to furnish the return of income, or statement to which the application relates by the due date because of —

(a) absence from Pakistan;

(b) sickness or other misadventure; or

(c) any other reasonable cause,

the Commissioner may, by order, in writing, grant the applicant an extension of time for furnishing the return, or statement, as the case may be.

(4) An extension of time under sub-section (3) should not exceed fifteen days from the due date for furnishing the return of income, employer’s certificate, or statement, as the case may be, unless there are exceptional circumstances justifying a longer extension of time:

Provided that where the Commissioner has not granted extension for furnishing return under sub-section (3) or sub-section (4), the Chief Commissioner may on an application made by the taxpayer for extension or further extension, as the case may be, grant extension or further extension for a period not exceeding fifteen days unless there are exceptional circumstances justifying a longer extension of time.

(6) An extension of time granted under sub-section (3) shall not, for the purpose of charge of default surcharge under sub-section (1) of section 205, change the due date for payment of income tax under section 137.

ISLAMABAD: Federal Board of Revenue (FBR) on Friday said that it has already given statutory time to taxpayers for filing income tax returns for tax year 2020.

Therefore, no further date will be extended beyond December 08, 2020.

The FBR in an office order intimated about the date for return filing to all the chief commissioners of Inland Revenue. However, the FBR said that taxpayers should be facilitated who request date extension explaining failure to comply with due date.

According to the provision Section 114 of the Income Tax Ordinance, 2001, annual tax return is required to be filed by on or before September 30 every year implying a period of 90 days to taxpayers to discharge their legal obligation.

This year, since new income tax return form was uploaded on IRIS on September 08, 2020, the deadline for filing of the tax return was extended through Circular No. 04 of 2020 on September 30, 2020 till December 08, 2020, allowing the citizens full statutorily – mandated time of 90 days in one go; piecemeal repeated extensions compromise tax administration’s credibility and adversely affect taxpayers’ perception for the future, the FBR said.

The FBR further said that provisions of Section 119(I) of the Ordinance stipulates that a “person required to furnish a tax return under Section 114 … may apply, in writing, to the Commissioner for an extension of time to furnish the return.”

Since the date of filing of tax returns for the tax year 2020, being December 08, 2020 is retained as the final date for the purpose, it is absolutely necessary that commissioners should grant extension in all cases of hardship of any nature.

In order to render the entire process of filing for extension and granting of time to taxpayers for filing of tax returns, IRIS is being modified to make it facilitative and less time-consuming, according to the office order.

The Chief Commissioners have been directed to be fully vigilant and ensure that no requests for extension remain unattended in their jurisdiction.