KARACHI: People can still file their annual income tax returns after due date for appearing on the Active Taxpayers List (ATL) after paying default surcharge.

The last date for filing income tax returns for tax year 2019 was February 28, 2020 and FBR issued ATL – 2019 of March 01, 2020. With the issuance of new ATL the ATL-2018 was no more applicable. Thus, those persons filed income tax returns for tax year 2018 and availing reduced rate of withholding tax rates on the basis of ATL 2018.

However, those persons filed their returns for tax year 2019 will avail the reduced rate of withholding tax rates and their names appeared on the ATL 2019 till the next ATL issued on March 01, 2021.

The FBR issued a clarification on the news items relating to actual number of tax returns filed in Tax Year 2019 and Tax Year 2018 published in the newspapers. FBR has clarified that number of tax returns filed in Tax Year 2018 till 28th February 2019 were 16,95,560 whereas the number of tax returns filed in Tax Year 2019 till 28th February, 2020 were 24,72,609 which showed an increase of 45 % compared to corresponding month in the last Tax Year.

FBR has further stated that date for filing tax returns were extended in Tax Year 2018 and the last date for filing tax returns was set as 9th August, 2019. The news items depicted the comparison of tax returns filed till the last date of Tax Year 2018 with last date of Tax Year 2019 which gave the perception that the actual tax returns filed in Tax Year 2019 have decreased compared to Tax Year 2018.

FBR has further added that the total period from the last date of Tax Year 2018 till last date of Tax Year 2019 consists of almost six months. This period of six months for Tax Year 2019 is comparably very short with that of Tax Year 2018. The number of Tax Returns 24,72,609 filed in six months for Tax Year 2019 shows great achievement of FBR.

The people continue to file tax returns to come on Active Taxpayers List even after last date but the returns can only be filed by paying surcharge after the set last date.

ISLAMABAD: Federal Board of Revenue (FBR) has launched crackdown action against around 300,000 non-filers of annual returns for tax year 2019.

The tax authorities have started sending notices to individuals and companies who filed their returns and declaration of assets for tax year 2018 but failed to comply this obligation in the subsequent year.

The FBR issued Active Taxpayers List (ATL) on March 01, 2020 for tax year on the basis of return filed up to February 29, 2020.

The ATL revealed that around 2.53 million individuals/companies filed annual returns for tax year 2019. Meanwhile, the estimated return filing for tax year 2018 was increased to record high of over 2.83 million, showing a gap of around 300,000 returns.

However, the return filing has increased by 60 percent when compared with 1.6 million returns filed till February 28, 2019.

Under Section 114 of Income Tax Ordinance, 2001, the FBR explained the mandatory requirement of return filing on certain classes of individuals and companies.

As per the law every company registered with Securities and Exchange Commission (SECP) is required to file returns. But in contrast the FBR received around 40,988 corporate returns for tax year 2019.

On the other hand the SECP had registered around 100,000 companies till June 30, 2019. This shows that around 59 percent corporate entities had failed to comply with mandatory requirement.

A statement issued by the FBR on February 29 revealed that it had received 2.34 million returns from salary and business individuals. While another 62,403 returns were filed by Association of Persons (AOPs).

Tax officials said that the tax authorities had started issuing notices giving opportunity to non-filers to ensure compliance along with payment of late filing.

The sources said that the action had been initiated after expiry of due date for filing tax returns, which was February 28, 2020.

In case persons/company deliberately default then penal provisions may be invoked.

According to tax ordinance, in case a person fails to file return of income by due date than such person is required to pay a penalty equal to 0.1 percent of the tax payable in respect of that tax year for each day of default subject to a maximum penalty of 50 percent of the tax payable provided that if the penalty worked out as aforesaid is less than forty thousand rupees or no tax is payable for that tax year such person shall pay a penalty of forty thousand rupees.

In case a person deliberately not comply with the notice for filing return then such person would be liable to fine or imprisonment for one year.