KARACHI: The Finance Bill 2020 has proposed amendment to laws pertaining to concealed income. Under the amendment the identified concealed income to be added under head of business income.
The Finance Bill 2020 proposed amendment to Section 111 of Income Tax Ordinance, 2001.
As per interpretation of Finance Bill, 2020, Deloitte Yousuf Adil Chartered Accountants explained that as per existing law, suppressed amount of production, sales or any amount chargeable to tax or of any item of receipt liable to tax shall be included in the person’s income chargeable to tax under head “Income from Other Sources” to the extent it is not adequately explained.
The Finance Bill 2020 proposes to tax such amount under head of “Income from Business”.
Since, such items pertain to business activities of a person, therefore, the same should be liable to tax under head of Income from Business.
Consequent to proposed amendments, the relevant expenses incurred would then be allowable.
However, the amount credited, value of the investment, money, value of the article, or amount of expenditure shall still be included in the person’s income chargeable to tax under the head “Income from Other Sources” to the extent it is not adequately explained.