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  • PKR makes recovery against dollar for fourth straight session

    PKR makes recovery against dollar for fourth straight session

    KARACHI: The Pakistani Rupee (PKR) continued recovery against the dollar for the fourth straight session on Wednesday owing to lower international oil prices and optimism prevailed over return of Ishaq Dar as the finance minister.

    The local unit strengthened by PKR 7.59 against the dollar during the last four sessions. The exchange rate reached near to record low of PKR 239.71 on September 22, 2022 to the dollar but ended at PKR 232.12 on September 28, 2022.

    READ MORE: PKR strengthens sharply to dollar during last three sessions

    On Wednesday, the exchange rate witnessed a gain of PKR 1.79 to end at PKR 232.12 to the dollar from previous day’s closing of PKR 233.91 in interbank foreign exchange market.

    Market analysts said that the nomination of Ishaq Dar had sent positive sentiments to the foreign exchange market.

    Ishaq Dar on Wednesday took oath as federal minister. Previously, he was known to effectively control the exchange rate in the last tenure of PML (N) government.

    READ MORE: Dollar tumbles to PKR as market welcomes Dar nomination

    Meanwhile, the international oil prices are also crashed which helped the rupee to make gain.

    It is worth mentioning that the rupee on last Friday recovered against the dollar after witnessed a consecutive 15-session fall.

    During this period the local currency depreciated by PKR 21.10 against the dollar from the interbank closing on September 01, 2022 at PKR 218.60.

    The local currency witnessed the historic low at PKR 239.94 to the dollar on July 28, 2022.

    READ MORE: PKR ends 15-day losing streak; recovers against dollar

    Currency experts said that the rupee was recovered because of contraction in current account deficit. Pakistan current account deficit recorded a contraction of 19 per cent during first two months (July – August) of the current fiscal year 2022/2023.

    Further, the experts said that the recent measures taken by the SBP also helped the rupee to gain value.

    However, the rupee failed to get support from the latest announcement of the State Bank of Pakistan (SBP) about the funds of Saudi Arabia.

    The rupee has witnessed a continuous depreciation against the greenback even after the inflows received from the International Monetary Fund (IMF).

    READ MORE: Rupee slumps for 15th straight session against dollar

    The local currency recorded some recovery against the greenback after the IMF fund was transferred to the State Bank of Pakistan (SBP). However, the removal of sanction on import of luxury and non-essential items the rupee again started free fall.

    The currency experts said that although the IMF inflows would help the further inflows under bilateral and multilateral sources. However, the devastation of floods has changed the economic environment scenario.

    The torrential rains and flash floods have inflicted a loss of over $10 billion to Pakistan’s economy. The devastation will prompt the country to make imports in the coming days, especially for agriculture products.

    The rupee also fell due to continuous depletion in foreign exchange reserves of the country.

  • Dollar plummets to PKR 231.50 in early trade on Sept 28, 2022

    Dollar plummets to PKR 231.50 in early trade on Sept 28, 2022

    KARACHI: US dollar plummeted to Pakistani Rupee (PKR) at 231.50 in early interbank foreign exchange trading on Wednesday Sept 28, 2022.

    The dollar is being traded at PKR 231.50 while recording a fall of PKR 2.41 from previous day’s closing of PKR 233.91 in interbank foreign exchange market.

    Market analysts said that the nomination of Ishaq Dar had sent positive sentiments to the foreign exchange market.

    Ishaq Dar sworn in as senator on Tuesday after returning to Pakistan. Previously, he was known to effectively control the exchange rate in the last tenure of PML (N) government.

    Meanwhile, the international oil prices are also crashed which helped the rupee to make gain.

    It is worth mentioning that the rupee on last Friday recovered against the dollar after witnessed a consecutive 15-session fall.

    During this period the local currency depreciated by PKR 21.10 against the dollar from the interbank closing on September 01, 2022 at PKR 218.60.

    The local currency witnessed the historic low at PKR 239.94 to the dollar on July 28, 2022.

    Currency experts said that the rupee was recovered because of contraction in current account deficit. Pakistan current account deficit recorded a contraction of 19 per cent during first two months (July – August) of the current fiscal year 2022/2023.

    Further, the experts said that the recent measures taken by the SBP also helped the rupee to gain value.

    However, the rupee failed to get support from the latest announcement of the State Bank of Pakistan (SBP) about the funds of Saudi Arabia.

    The rupee has witnessed a continuous depreciation against the greenback even after the inflows received from the International Monetary Fund (IMF).

    The local currency recorded some recovery against the greenback after the IMF fund was transferred to the State Bank of Pakistan (SBP). However, the removal of sanction on import of luxury and non-essential items the rupee again started free fall.

  • PTBA identifies ambiguity in property value declaration

    PTBA identifies ambiguity in property value declaration

    Pakistan Tax Bar Association (PTBA) on Tuesday identified ambiguity in declaring of immovable property in income tax return filing.

    PTBA President Rana Munir Hussain in a letter to the chairman of Federal Board of Revenue (FBR) stated that the apex tax bar had received several representations from the members of different affiliated tax bars across the country; one of the reasons of delay in filing of Income Tax Return for the Tax Year 2022 in is an ambiguity in declaration of value of the properties purchased and sold during the year.

    READ MORE: FBR allows refund adjustment to facilitate return filing

    The said burning issues need the consideration of the FBR in the light of prevailing circumstances.

    In this respect tax bar summarized the following questions: –

    Question No. 1

    A tax payer sold his immovable property in consideration of Rs.6,000,000/- through a written agreement to sell during the tax year 2022 and received the said amount in shape of pay order as provided u/s 75A of the Income Tax Ordinance 2001.

    READ MORE: FPCCI seeks statutory time for return filing after error removals

    Whereas at the time of execution of sale deed the parties were compelled to mention the sale price at Rs.7,500,000/- as per rate notified by the D.C being minimum price.

    The PTBA urged the FBR to clarify that can the tax payer (seller) incorporate the sale proceed at Rs.7,500,000/- as appearing on the registered sale deed in his wealth reconciliation statement or he will have to record the actual consideration of Rs.6,000,000/- received from the buyer?

    Question No. 2

    A tax payer sold his immovable property through agreement to sell in consideration of Rs.40,000,000/- and received the said amount in shape of pay order as provided u/s 75A of the Ordinance.

    READ MORE: FBR advised to extend tax return filing date for three months

    Sale deed was executed at Rs.45,000,000/- being the minimum price notified by D.C.

    On the other hand, the seller as well as the buyer paid the tax u/s 236C and 235K at the value fixed by FBR i.e. Rs.6,500,000/-.

    Clarification is sought.

    Whether the seller can record in his wealth statement the amount at Rs.65,000,000/- whereas in actual, he received Rs.40,000,000/-.

    What price of the asset has to declared by the buyer in his wealth statement?

    READ MORE: PTBA suggests measures to resolve refund adjustment ahead return filing deadline

    The actual price paid at Rs.40,000,000/- ; OR

    The price fixed by D.C. at Rs.45,000,000/-; OR

    The price fixed by FBR at Rs.65,000,000/-.

    In the light of the submissions made above it is requested to issue a clarification as early as possible. Moreover, timely decision taking in this regard would not only be appreciated by the taxpayers/legal fraternity, who are working very hard day and night by playing their part towards the legal responsibility for contributing towards national exchequer but also in collection of taxes at the appropriate time.

  • PKR strengthens sharply to dollar during last three sessions

    PKR strengthens sharply to dollar during last three sessions

    KARACHI: Pakistani Rupee (PKR) gained sharply against the US dollar during last three sessions on Tuesday on lower international oil prices and nomination of Ishaq Dar as finance minister.

    The local unit strengthened by PKR 5.80 against the dollar during the last three sessions. The exchange rate reached near to record low of PKR 239.71 on September 22, 2022 to the dollar but ended at PKR 233.91 on September 27, 2022.

    READ MORE: Dollar tumbles to PKR as market welcomes Dar nomination

    On Tuesday, the exchange rate witnessed a gain of PKR 3.11 to end at PKR 233.91 to the dollar from previous day’s closing of PKR 237.02 in interbank foreign exchange market.

    Market analysts said that the nomination of Ishaq Dar had sent positive sentiments to the foreign exchange market.

    Ishaq Dar sworn in as senator on Tuesday after returning to Pakistan. Previously, he was known to effectively control the exchange rate in the last tenure of PML (N) government.

    READ MORE: PKR ends 15-day losing streak; recovers against dollar

    Meanwhile, the international oil prices are also crashed which helped the rupee to make gain.

    It is worth mentioning that the rupee on last Friday recovered against the dollar after witnessed a consecutive 15-session fall.

    During this period the local currency depreciated by PKR 21.10 against the dollar from the interbank closing on September 01, 2022 at PKR 218.60.

    The local currency witnessed the historic low at PKR 239.94 to the dollar on July 28, 2022.

    Currency experts said that the rupee was recovered because of contraction in current account deficit. Pakistan current account deficit recorded a contraction of 19 per cent during first two months (July – August) of the current fiscal year 2022/2023.

    READ MORE: Rupee slumps for 15th straight session against dollar

    Further, the experts said that the recent measures taken by the SBP also helped the rupee to gain value.

    However, the rupee failed to get support from the latest announcement of the State Bank of Pakistan (SBP) about the funds of Saudi Arabia.

    The rupee has witnessed a continuous depreciation against the greenback even after the inflows received from the International Monetary Fund (IMF).

    The local currency recorded some recovery against the greenback after the IMF fund was transferred to the State Bank of Pakistan (SBP). However, the removal of sanction on import of luxury and non-essential items the rupee again started free fall.

    READ MORE: Rupee ends near historic low; Dollar gains to PKR 239.65

    The currency experts said that although the IMF inflows would help the further inflows under bilateral and multilateral sources. However, the devastation of floods has changed the economic environment scenario.

    The torrential rains and flash floods have inflicted a loss of over $10 billion to Pakistan’s economy. The devastation will prompt the country to make imports in the coming days, especially for agriculture products.

    The rupee also fell due to continuous depletion in foreign exchange reserves of the country.

  • Pakistan reviews petroleum prices on Sept 30, 2022 amid crash in global rates

    Pakistan reviews petroleum prices on Sept 30, 2022 amid crash in global rates

    Pakistan is set to review petroleum prices on September 30, 2022 for the next fortnight starting from October 01, 2022. The government will review the prices when the prices in international markets have been crashed to multi months low.

    According to Reuters news agency oil prices fell $2 a barrel a day earlier, settling at nine-month lows in choppy trade, pressured by a strengthening dollar as market participants awaited details on new sanctions on Russia.

    READ MORE: New petroleum prices in Pakistan effective from September 21, 2022

    Brent crude futures for November settled down $2.09, or 2.4 per cent, to $84.06 a barrel, plunging below levels reached on January 14. U.S. West Texas Intermediate (WTI) crude for November delivery dropped by $2.06, or 2.3 per cent to $76.71, the lowest since Jan. 6.

    Previously, the government revised the petroleum prices on September 21, 2022, which was scheduled to be announced on September 15, 2022.

    According to a statement issued by the Finance Division, the government decided to increase prices of petrol by Rs1.45 per liter to Rs237.43 from previous rate of Rs235.98.

    READ MORE: New petroleum prices in Pakistan from September 01, 2022

    However, the government kept the price of high speed diesel (HSD) unchanged at Rs247.43 per liter.

    The price of kerosene oil has been reduced by Rs8.30 per liter to Rs202.02 from Rs210.32.

    Similarly, the rate of light diesel oil has been reduced by Rs4.26 per liter to Rs198.28 from previous rate of Rs201.54.

    It is pertinent to mention that the government to announce the prices of petroleum products in the wake of massive appreciation in rupee value as well. Besides, Ishaq Dar is also assuming the charge as finance minister. These factors would also impact the review.

    READ MORE: New petroleum prices in Pakistan from August 16, 2022

    The previous government of PTI had kept both the petroleum levy and sales tax at zero in order to provide relief to the masses. The PTI government also provided a huge subsidy on prices of petroleum products in order to lower the rates and provide relief to the masses.

    However, former Prime Minister Imran Khan was removed through a vote of no-confidence motion on April 10, 2022. Since then the new coalition government led by PML-N increased the prices of petroleum products sharply on three different occasions.

    READ MORE: New petroleum prices in Pakistan from August 1, 2022

    The present government in the budget estimated to collect Rs855 billion as petroleum levy during the fiscal year 2022/2023. As this fiscal year is starting from July 01, 2022, it is likely that the government will opt to impose the levy from this date.

    The exchange rate has seen massive decline in rupee value during past week despite inflows received from the International Monetary Fund (IMF).

    READ MORE: New prices of petroleum products in Pakistan from July 01, 2022

    Pakistani Rupee (PKR) has plunged by PKR 20 against the US dollar since the country received tranche from the International Monetary Fund (IMF). The country received a tranche of $1.16 billion from the IMF under Extended Fund (EFF) loan program on August 31, 2022.

    The government was hopeful of improvement in economic indicators once the money is received from the IMF. However, in contrast the PKR fell sharply since the IMF funds transferred to the State Bank of Pakistan (SBP).

  • Dollar plunges to PKR 233.50 in early interbank trading on September 27, 2022

    Dollar plunges to PKR 233.50 in early interbank trading on September 27, 2022

    KARACHI: US dollar plunged to Pakistan Rupee (PKR) 233.50 in early day trading on Tuesday September 27, 2022 owing to change of finance minister and falling international oil prices.

    The foreign currency lost PKR 3.52 and was being traded at PKR 233.50 by 10:00 AM (Pakistan Standard Time) as compared with last day closing of PKR 237.02 in interbank foreign exchange market.

    READ MORE: Dollar tumbles to PKR as market welcomes Dar nomination

    Currency analysts said that change of finance minister had impacted the market positively. The foreign exchange market reacted to the change a day earlier as well.

    Ishaq Dar has been nominated for the slot of Pakistan Finance Minister. He had already severed at this portfolio in the previous PML (N) government. Dar was known for controlling the exchange rate. Although many quarters had criticized him for artificial stabilizing the rupee. Dar is scheduled to take oath as finance minister today.

    READ MORE: PKR ends 15-day losing streak; recovers against dollar

    It is worth mentioning that the rupee on last Friday recovered against the dollar after witnessed a consecutive 15-session fall.

    During this period the local currency depreciated by PKR 21.10 against the dollar from the interbank closing on September 01, 2022 at PKR 218.60.

    The local currency witnessed the historic low at PKR 239.94 to the dollar on July 28, 2022.

    Currency experts said that the rupee was recovered because of contraction in current account deficit. Pakistan current account deficit recorded a contraction of 19 per cent during first two months (July – August) of the current fiscal year 2022/2023.

    Further, the experts said that the recent measures taken by the SBP also helped the rupee to gain value.

    However, the rupee failed to get support from the latest announcement of the State Bank of Pakistan (SBP) about the funds of Saudi Arabia.

    READ MORE: Rupee slumps for 15th straight session against dollar

    The rupee has witnessed a continuous depreciation against the greenback even after the inflows received from the International Monetary Fund (IMF).

    The local currency recorded some recovery against the greenback after the IMF fund was transferred to the State Bank of Pakistan (SBP). However, the removal of sanction on import of luxury and non-essential items the rupee again started free fall.

    READ MORE: Rupee ends near historic low; Dollar gains to PKR 239.65

    The currency experts said that although the IMF inflows would help the further inflows under bilateral and multilateral sources. However, the devastation of floods has changed the economic environment scenario.

    The torrential rains and flash floods have inflicted a loss of over $10 billion to Pakistan’s economy. The devastation will prompt the country to make imports in the coming days, especially for agriculture products.

    The rupee also fell due to continuous depletion in foreign exchange reserves of the country.

  • Dollar tumbles to PKR as market welcomes Dar nomination

    Dollar tumbles to PKR as market welcomes Dar nomination

    KARACHI: The US dollar tumbled against the Pakistani Rupee (PKR) by Rs2.63 on Monday on the nomination of Ishaq Dar as finance minister of the country.

    The exchange rate recorded a gain of Rs2.63 in rupee value to end at Rs237.02 to the dollar from last Friday’s closing of Rs239.65 in the interbank foreign exchange market.

    Currency experts said that the market responded positively to nomination of Ishaq Dar as the finance minister by the present coalition government headed by PML (N).

    READ MORE: PKR ends 15-day losing streak; recovers against dollar

    According to reports Ishaq Dar would assume the charge on Tuesday. A day earlier, Miftah Ismail had announced to resign from the portfolio of the finance minister.

    The experts said that the market was expecting improvement in rupee value on Dar’s return. Previously, Dar had served as finance minister and he was known for controlling the exchange rate. Although, Dar was criticized for stabilizing the local currency artificially.

    Earlier, in the day the dollar slipped by more than four rupees but later it recovered earlier day’s losses.

    It is worth mentioning that the rupee on last Friday recovered against the dollar after witnessed a consecutive 15-session fall.

    READ MORE: Rupee slumps for 15th straight session against dollar

    During this period the local currency depreciated by PKR 21.10 against the dollar from the interbank closing on September 01, 2022 at PKR 218.60.

    The local currency witnessed the historic low at PKR 239.94 to the dollar on July 28, 2022.

    Currency experts said that the rupee was recovered because of contraction in current account deficit. Pakistan current account deficit recorded a contraction of 19 per cent during first two months (July – August) of the current fiscal year 2022/2023.

    Further, the experts said that the recent measures taken by the SBP also helped the rupee to gain value.

    However, the rupee failed to get support from the latest announcement of the State Bank of Pakistan (SBP) about the funds of Saudi Arabia.

    READ MORE: Rupee ends near historic low; Dollar gains to PKR 239.65

    Saudi Fund for Development (SFD) has confirmed rollover of $3 billion deposit maturing on December 05, 2022 for one year. Deposit is placed with SBP and is part of its forex reserves. This reflects continuing strong and special relationship between KSA and Pakistan, according to the SBP.

    The rupee has witnessed a continuous depreciation against the greenback even after the inflows received from the International Monetary Fund (IMF).

    The local currency recorded some recovery against the greenback after the IMF fund was transferred to the State Bank of Pakistan (SBP). However, the removal of sanction on import of luxury and non-essential items the rupee again started free fall.

    The currency experts said that although the IMF inflows would help the further inflows under bilateral and multilateral sources. However, the devastation of floods has changed the economic environment scenario.

    The torrential rains and flash floods have inflicted a loss of over $10 billion to Pakistan’s economy. The devastation will prompt the country to make imports in the coming days, especially for agriculture products.

    The rupee also fell due to continuous depletion in foreign exchange reserves of the country.

  • Miftah resigns as finance minister after taking tough decisions

    Miftah resigns as finance minister after taking tough decisions

    Dr. Miftah Ismail has resigned the post of the finance minister on Sunday. Ismail has taken many tough decisions for the country’s economy during his stay since April 2022.

    “In a meeting with Mian Nawaz Sharif and Prime Minister Shehbaz Sharif today [Sunday September 25, 2022], I have verbally resigned as Finance Minister. I will tender a formal resignation upon reaching Pakistan. It’s been an honour to serve twice as Finance Minister,” Miftah Ismail said in a Tweet.

    READ MORE: Pakistan’s forex reserves slip to $14.07 billion

    Miftah Ismail assumed the charge as finance minister as soon the new coalition government led by PML (N) came into the power after the former Prime Minister Imran Khan of Pakistan Tehreek I Insaaf (PTI) was ousted through a vote of confidence.

    During this period Pakistan had seen severe economic crisis, especially the balance of payment, local currency depreciation and negotiations with the International Monetary Fund (IMF).

    READ MORE: ECC approves clearance of banned items landed till August 18, 2022

    The biggest achievement of Miftah Ismail was successful negotiations with the IMF. Although, the government had taken very tough decisions, especially removal of subsidies on petroleum products and energy to achieve the IMF bailout package.

    READ MORE: USC to disburse ration bags worth Rs540 million to flood victims

    It is learnt that senator Ishaq Dar is assuming the charge as finance minister. Dar was living abroad for the last many years. However, the present government is believing that Dar was the best choice to face challenges that the country was facing.

    Ahsan Iqbal, Federal Minister Planning and Development has acknowledged the services of Miftah Ismail and said in a Tweet: “You served under most challenging circumstances. You saved default at the cost of personal reputation. Your services will be remembered.”

    READ MORE: Pakistan State Oil gets Rs30 billion to avoid default

  • PTBA suggests measures to resolve refund adjustment ahead return filing deadline

    PTBA suggests measures to resolve refund adjustment ahead return filing deadline

    Pakistan Tax Bar Association (PTBA) has suggested measures to tax authorities to resolve the issue of refund adjustment just ahead of the deadline to file income tax return tax year 2022.

    It is important to note that the last date for filing income tax return is September 30, 2022.

    READ MORE: Penalties for failure to file return tax year 2022 within due date

    The Federal Board of Revenue (FBR) has blocked the adjustment of previous years’ refunds in the income tax return form for the tax year 2022. PTBA and its affiliated tax bars raised the issues on various times but the issue is not resolved so far.

    The PTBA on September 24, 2022 once again approached the FBR chairman to resolve the issue and the apex tax bar also suggested measures to facilitate taxpayers in this regard.

    It said that adjustment of earlier refunds due, in the cases against admitted tax liability for Tax Year 2022 is a statutory right of a taxpayer, which has always been acknowledged, even by the system of IRIS from years to years.

    READ MORE: FBR fails to remove return filing glitches; KTBA seeks legal time

    Tax Year 2022 is the first Tax Year where for the key to claim adjustment of refund in the return form available on portal, has been blocked without assigning any plausible legal justification.

    The sole stance of the officials of FBR in this respect is that various tax payers claim refunds in their returns which is not admissible.

    “We wish to bring on record that PTBA would never support any such illegal action of any person and at the same time it is submitted that the responsibility to verify the authenticity of refund was on the field formations of the FBR who never took any pain to verify the claim of refunds at their own.”

    On the other side facility to adjust refund against admitted tax liability for Tax Year 2022 has been taken away due to which the taxpayers have been forced to pay tax in cash, no matter how much refund is due to them.

    READ MORE: FBR advised to fix glitches for smooth filing of income tax returns

    It would not be out of place to mention here that there are plethora of cases decided by the Courts of the Country that the taxpayer cannot be deprived of his right to claim admissible refunds either in cash or through adjustment of same against his any tax liability payable under the law.

    The Federal Tax Ombudsman (FTO) Vide order dated 27-05-2022 in an own motion case has recommended to grant adjustment of the refund against admitted tax liability in terms of section 170(3)(a) of the Ordinance

    The PTBA suggested following steps to resolve the issue of adjustment of refunds:

    1. In the column of refund adjustment in return available on portal there may be a link to specify the Tax Year where from the tax payer is making adjustment of Refund.

    2. The returns from Tax Year 2014 onward have been submitted through IRIS and every return submitted by the tax payer is clearly depicting the amount of refund claimed by the tax payer.

    3. For example, if the tax payer claims the refund adjustment from Tax Year-2016, the system should automatically check that either any refund for Tax Year 2016 is claimed and appearing on the return for Tax Year 2016 or not.

    READ MORE: Dental practitioners directed to get sales tax registration

    4. If refund is claimed and appearing on the return of Tax Year 2016, the system should allow the tax payer to claim refund adjustment against his tax demand for Tax Year 2022.

    5. After submission of tax return for Tax Year 2022, the concerned officer holding jurisdiction over the case be made responsible to first verify the withholdings/payments made by the tax payer in the year from which refund adjustment has been claimed by the tax payer through ITMS.

    6. If the data available on ITMS verifies the deductions, collections and payments made and claimed by the taxpayer, no further action would be required except making adjustment entries in the DCR regarding adjustment of refund for Tax Year 2016 against tax demand for Tax Year 2022, so that the taxpayer may not be able to claim the same refund again.

    7. If data available on ITMS does not match with the claim of the taxpayer, then the concerned officer should call the tax payer to explain his position in line with post refund audit under the Sales Tax Act.

    8. If the tax payer fails to verify his claim of refund, then a strict action may be taken against that tax payer in accordance with the relevant provisions of law.

    9. A time line be fixed for verification of the claim of refund by the concerned officer, so that, the matter may not be kept pending for indefinite period.

    The PTBA said that in the light of the submissions made above it is requested that the taxpayers may not be deprived from their statutory right to claim the refund adjustment of other year(s) against demand of this year.

    Moreover, timely decision taking in this regard by this good office would not only be appreciated by the taxpayers/legal fraternity, who are working very hard day & night by playing their part towards the legal responsibility for contributing towards national exchequer but also in collection of taxes at the appropriate time.

  • Penalties for failure to file return tax year 2022 within due date

    Penalties for failure to file return tax year 2022 within due date

    Tax laws have prescribed penalties for failure to file return for tax year 2022 within due date. The last date for filing income tax return for tax year 2022 is September 30, 2022. The Federal Board of Revenue (FBR) recently announced it would not extend the last date beyond September 30, 2022.

    Sources in the FBR said that the late filing of tax return would penal action as defined under the Income Tax Ordinance, 2001.

    READ MORE: FBR fails to remove return filing glitches; KTBA seeks legal time

    According to the tax laws, there are penalties where any person fails to furnish a return of income as required under Section 114 of Income Tax Ordinance, within due date.

    In case of failure to furnish return by due date, such person shall pay a penalty of equal to higher of:

    (a) 0.1 per cent of the tax payable in respect of that tax year for each day of default; or

    (b) rupees one thousand for each day of default: Provided that minimum penalty shall be —

    (i) rupees ten thousand in case of individual having seventy-five percent or more income from salary; or

    (ii) rupees fifty thousand in all other cases:

    READ MORE: FBR advised to fix glitches for smooth filing of income tax returns

    Provided further that maximum penalty shall not exceed two hundred percent of tax payable by the person in a tax year:

    Provided also that the amount of penalty shall be reduced by 75 per cent, 50 per cent and 25 per cent if the return is filed within one, two and three months respectively after the due date or extended due date of filing of return as prescribed under the law;

    Explanation.— For the purposes of this entry, it is declared that the expression “tax payable” means tax chargeable on the taxable income on the basis of assessment made or treated to have been made under section 120, 121, 122 or 122D.

    The tax laws also prescribed that where any person fails to furnish wealth statement or wealth reconciliation statement. In such case person shall pay a penalty of 0.1 per cent of the taxable income per week or Rs.100,000 whichever is higher.

    READ MORE: Dental practitioners directed to get sales tax registration

    The FBR sources said that besides imposition of penalties for failure to file return by due date the defaulting person will also not be included in the active taxpayers list.

    Section 182A of the Income Tax Ordinance, 2001 explained the situation when return not filed within due date.

    Section 182A. Return not filed within due date.—(1) Notwithstanding anything contained in this Ordinance, where a person fails to file a return of income under section 114 by the due date as specified in section 118 or by the date as extended by the Board under section 214A or extended by the Commissioner under section 119, as the case may be, such person shall—

    (a) not be included in the active taxpayers’ list for the year for which return was not filed within the due date:

    READ MORE: Tax rates on profit from bank deposits during year 2022/2023

    Provided that without prejudice to any other liability under this Ordinance, the person shall be included in the active taxpayer ‘ list on filing return after the due date, if the person pays surcharge at Rupees-

    (i) twenty thousand in case of a company;

    (ii) ten thousand in case of an association of persons;

    (iii) one thousand in case of an individual.

    “Explanation.—For the removal of doubt it is clarified that the provisions of this section shall apply from tax year 2018 and onwards for which the first Active Taxpayers List is to be issued on first day of March, 2019 under Income Tax Rules, 2002.; and

    (b) not be allowed, for that tax year, to carry forward any loss under Part VIII of Chapter IV;

    (c) not be issued refund during the period the person is not included in the active taxpayers’ list; and

    (d) not be entitled to additional payment for delayed refund under section 171 and the period the person is not included in the active taxpayers’ list, shall not be counted for computation of additional payment for delayed refund.